ata Consultancy Services (TCS) reported flat revenue growth for Q1 FY26, with consolidated sales rising just 1.3% year-on-year to ₹63,437 crore (US$7.40 billion)—falling short of analysts’ expectations of ₹64,666 crore (US$7.55 billion) HDFC Sky
Profit Up, Revenue Lagging
Despite weak top-line growth, TCS delivered a net profit of ₹12,760 crore, marking a 6% year-on-year increase (versus ₹12,040 crore last year) and beating analyst estimates of ₹12,216 crore. EBIT margins remained stable with no significant operating leverage
Headwinds from BSNL and US Discretionary Spends
The drop in revenue is partly due to the near-completion of a ₹14,000 crore BSNL project, which cut into growth. Additionally, sluggish client spending, especially from the US market, constrained new deal flow
Deal Bookings Slower, Hiring Continues
New deal wins fell to US$9.4 billion, down from US$12.2 billion in the previous quarter, due to customer caution
Despite this, TCS plans to hire over 40,000 freshers in FY26, focusing on strengthening its talent pipeline
Outlook: Cautious but Stable
CEO K Krithivasan noted that global macro and geopolitical uncertainty continues to impact demand. Analysts expect revenue to remain flat to slightly negative sequentially in constant currency, with margins remaining stable thanks to currency tailwinds and controlled costs NDTV Profit
What It Means for Investors
- 🚩 Revenue growth remains muted: Limited by deal ramp-downs and cautious spend.
- 📈 Profit sustains growth: Thanks to strong cost management and margin control.
- 🧭 Hiring signals confidence: Freshers’ intake suggests TCS is positioning for future projects.
Summary
TCS posted flat Q1 FY26 results, with 1.3% revenue growth and 6% profit growth, missing revenue expectations due to BSNL ramp-down and weak client spending. While the sunsetting of the BSNL contract and uncertain macro conditions weigh on growth, TCS is managing costs, investing in new talent, and remains cautious yet steady in its outlook.
