Tata Consultancy Services (TCS) witnessed a 2% dip in share price following the announcement of its Q1 FY26 results, which revealed a significant drop in Total Contract Value (TCV) and a spike in attrition rates.
The IT major’s TCV fell to $9.4 billion, down 22.95% from $12.2 billion in Q4 FY25. This marks a substantial sequential decline, reflecting the impact of ongoing global macroeconomic and geopolitical uncertainties, which have dampened enterprise technology spending across several regions.
Adding to investor concerns, the attrition rate for the last twelve months (LTM) stood at 13.8%, the highest the company has seen in nearly two years. The talent retention challenge comes at a time when global IT firms are grappling with volatile demand and changing workforce dynamics.
Despite these setbacks, TCS managed to post a consolidated net profit of ₹12,760 crore, up 4.38% quarter-on-quarter (QoQ), even though revenue from operations declined 1.62% QoQ to ₹63,437 crore in Q1 FY26. Year-on-year (YoY), net profit rose 5.98%, while revenue inched up 1.32%.
K Krithivasan, CEO & MD of TCS, commented, “The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures during this quarter.”
Performance by sector showed mixed results, with Energy, Resource, and Utilities leading the charge, growing 2.8% YoY, followed by BFSI at 1%, and Technology & Services at 1.8%.
However, constant currency revenue declined by 3.1% YoY, signaling the impact of currency fluctuations on global operations. Operating margin stood at 24.5%, while net margin was 20.1%, a level that continues to reflect TCS’s operational efficiency. The company also maintained a strong cash conversion ratio of 100.3%, demonstrating robust financial discipline.
TCS reported a Profit Before Tax (PBT) of ₹16,979 crore, which was up 3.52% QoQ and 4.61% YoY, indicating healthy underlying profitability despite revenue softness.
The company’s workforce stood at 6,13,069 employees as of 30th June 2025, showing its continued strength in talent capacity, even amid attrition challenges.
In a move to reward shareholders, the board declared an interim dividend of ₹11 per equity share of ₹1 each. The record date is 16 July 2025, and the dividend payout will be made on 4 August 2025.
Samir Seksaria, Chief Financial Officer, stated, “We continued our investments in long-term sustainable growth this quarter. We stayed agile and adapted to the dynamic environment, delivering steady margins. Our industry-leading profitability alongside robust cash conversion positions us well to make strategic investments for the future.”
Despite headwinds, TCS remains a trusted digital transformation partner for global organizations, and its strategic focus on long-term investments, talent development, and operational discipline continues to place it on firm ground.
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