Tata Consultancy Services (TCS) is set to capture attention in the stock market this Friday after revealing its fourth-quarter earnings. The IT powerhouse disclosed its financial performance for the fourth quarter of FY25 and the entire fiscal year on Thursday, coinciding with a market holiday in India. Investors are eager to dissect the implications of these results as they consider the future trajectory of this industry leader.

Q4 Financial Results Overview

In the latest quarter ending March 2025, TCS reported a net profit of ₹12,224 crore, reflecting a slight decline of 1.3% from ₹12,380 crore in the previous quarter. However, revenue showed a minor uptick, increasing by 0.8% to reach ₹64,479 crore, up from ₹63,973 crore quarter-on-quarter. In USD terms, revenue saw a 1% decrease, landing at $7,465 million.

• EBIT (Earnings Before Interest and Taxes) also experienced a small drop, falling 0.6% to ₹15,601 crore.
• The EBIT margin slipped from 24.5% to 24.2% quarter-on-quarter.

Employee Salary Hikes Deferred

In light of ongoing global economic challenges, particularly the escalating tariff war involving the United States, TCS announced it would postpone salary increases for employees starting April. Executives indicated that these adjustments would be implemented later in the financial year once market conditions stabilize.

Dividend Announcement

The board of TCS has proposed a final dividend of ₹30 per share for its shareholders, providing some reassurance amidst the financial fluctuations.

Analyst Insights: TCS Stock Outlook

Despite the fourth-quarter results falling short of expectations, analysts from Emkay Global Financial Services have expressed cautious optimism. According to Dipeshkumar Mehta, a Senior Research Analyst at Emkay, TCS’s operational performance reflected delays in decision-making processes and increased scrutiny on discretionary spending. Consequently, estimates have been reduced by 1.8% to 3%, adjusting for tariff-related uncertainties.

• Emkay Global maintains an ‘Add’ rating on TCS shares, lowering the target price by 10% to ₹3,500 per share, based on a multiple of 23x projected earnings for March 2027.

Future Projections from Choice Broking

Analysts from Choice Broking have offered mixed signals regarding TCS’s upcoming performance. They anticipate improved results for FY26, yet caution that ongoing macroeconomic pressures could delay client decisions and impact revenue growth. Projections suggest a compound annual growth rate (CAGR) of 7.2% in revenue, 10.7% in EBIT, and 10.8% in profit after tax (PAT) from FY25 to FY27E. They have retained a ‘Buy’ rating but adjusted their target price to ₹3,950 per share, reflecting a price-to-earnings ratio of 24x based on FY27 earnings estimates.

Stock Performance Summary

In recent trading, TCS shares have faced a decline, dropping 10% in the last month and 20% over the past three months. The stock has witnessed a 24% decrease in the last six months and an 18% fall over the past year. However, a longer-term perspective shows resilience, with an impressive 84% increase over the past five years. On Wednesday, TCS shares closed at ₹3,246.10, marking a 1.44% decrease on the Bombay Stock Exchange (BSE).

Investors are now keenly watching TCS as it navigates these turbulent waters, weighing both its immediate challenges and future growth potential.