💰 Financial Performance

Revenue Growth by Segment

Manufacturing segment revenue reached INR 25,170 Cr in FY2025, growing 7.1% YoY. Other segments contributed INR 23,011 Cr, reflecting a 9.7% growth. Overall revenue from operations was INR 255,324 Cr in FY2025, a 6.0% increase compared to INR 240,893 Cr in FY2024.

Geographic Revenue Split

North America and Europe (including the UK) are the primary markets, driving over 81% of total revenue in FY2025. In FY2024, these regions accounted for approximately 83% of revenue. Growth in these markets has moderated, though the UK remained resilient.

Profitability Margins

Operating Profit Margin (OPM) stood at 26.6% in Q1 FY2026. Profit After Tax (PAT) margin was 19.1% in FY2025 (INR 48,553 Cr) and 19.3% in FY2024 (INR 46,585 Cr). PAT margin improved to 20.2% in Q1 FY2026.

EBITDA Margin

OPBDIT/OI (Operating Margin) was 26.4% in FY2025, compared to 26.7% in FY2024 and 26.3% in FY2023. EBIT (Earnings Before Interest and Tax) for FY2025 was INR 62,165 Cr, representing 24.3% of revenue and a 4.8% YoY growth.

Capital Expenditure

TCS is planning investments in AI and sovereign data centers estimated between $600 million and $1 billion (INR 5,000 Cr to INR 8,400 Cr approx.), to be phased out over time.

Credit Rating & Borrowing

Maintains a top-tier credit profile with a 'Stable' outlook. Interest coverage ratio was 96.3x in Q1 FY2025, up from 82.6x in FY2024. Total debt/OPBDIT remains extremely low at 0.1x.

⚙️ Operational Drivers

Raw Materials

Not applicable for IT services; however, human capital/employee cost is the primary driver, representing the bulk of operational expenses.

Import Sources

None

Key Suppliers

None

Capacity Expansion

None

Raw Material Costs

Employee wage cost inflation is a key factor. Attrition levels were 13.8% in Q1 FY2026, up from 12.1% in Q1 FY2025, but significantly lower than the 21.5% peak in Q2 FY2023.

Manufacturing Efficiency

Utilization levels have been improved to support margins. Execution track record is established through a CMMI-level 5 certification.

Logistics & Distribution

Not applicable; services are delivered through a global offshore model and digital platforms.

📈 Strategic Growth

Expected Growth Rate

6.00%

Growth Strategy

Growth is driven by a robust order pipeline with a Total Contract Value (TCV) of $9.4 billion as of Q1 FY2026. Strategy includes becoming an AI-led technology services company, investing in sovereign data centers, vendor consolidation deals, and expanding AI-led platforms and productized SaaS offerings.

Products & Services

IT solutions, infrastructure services, global consulting, engineering and industrial services, Business Process Management (BPM), and software products like BaNCS (financial solutions).

Brand Portfolio

TCS, BaNCS.

New Products/Services

AI-led platforms and sovereign digital stacks; specific revenue contribution percentages for new launches are not disclosed.

Market Expansion

Focus on India, UK, Asia Pacific, and Middle East markets to offset moderation in North America and Continental Europe.

Market Share & Ranking

Largest Indian IT services company; industry leader in operating margins and return on equity (ROE).

Strategic Alliances

Stronger partnerships with emerging industrial sectors and co-innovation partnerships with enterprises.

🌍 External Factors

Industry Trends

Shift toward AI-led services, sovereign digital stacks, and energy transition/circular economy technology.

Competitive Landscape

Intense competition from global players (Accenture, IBM, Capgemini, Cognizant) and domestic peers (Infosys, HCL Tech, Wipro).

Competitive Moat

None

Macro Economic Sensitivity

Highly sensitive to global GDP growth, projected at 2.8% for 2025. Revenue growth in constant currency terms was 4.2% in FY2025.

Consumer Behavior

Clients are re-evaluating discretionary technology spending due to macro-economic uncertainty, leading to slower deal conversions.

Geopolitical Risks

Exposure to US tariff uncertainties and adverse regulatory/legislative changes in key operating markets (North America and Europe).

⚖️ Regulatory & Governance

Industry Regulations

Subject to immigration laws and data privacy regulations; potential for substantive liabilities or fines in case of data breaches.

Environmental Compliance

Direct exposure to environmental risks is considered not material for the service-oriented business.

Taxation Policy Impact

Effective tax rate is reflected in the PAT/OI of 19.1% for FY2025.

Legal Contingencies

FY2024 results excluded a specific settlement of a legal claim; total contingent liability amounts not specified in snippets.

⚠️ Risk Analysis

Key Uncertainties

Macro-economic uncertainties in key markets and potential adverse changes in immigration laws impacting the skilled workforce.

Geographic Concentration Risk

High concentration with ~81-83% of revenue derived from North America and Europe.

Third Party Dependencies

Dependency on skilled talent pool and niche technology partners for large-scale contract execution.

Technology Obsolescence Risk

Risk of rapid technology disruption; mitigated by perpetual reskilling of talent and AI-led platform expansion.

Credit & Counterparty Risk

Superior liquidity with cash and bank balances of INR 48,704 Cr as of June 30, 2025, ensuring high receivables quality.