Tata Consultancy Services (TCS), a global leader in IT services, has announced a 6% increase in net profit for the first quarter of fiscal year 2026, reaching Rs 12,760 crore. This performance exceeded analyst expectations and marked a significant rise from the Rs 12,040 crore reported in the same quarter of the previous year. The company also reported a 1.3% year-on-year growth in revenue from operations, totaling Rs 63,437 crore for the April-June quarter. This growth reflects TCS's resilience in navigating a challenging global economic landscape.
In addition to its financial performance, TCS declared an interim dividend of Rs 11 per share, which will be distributed to equity shareholders on August 4, 2025. K Krithivasan, the Chief Executive Officer and Managing Director, highlighted the challenges posed by global uncertainties. "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," he stated.
Krithivasan emphasized the company's commitment to helping customers navigate these challenges through cost optimization, vendor consolidation, and AI-led business transformation.
The company's operating margins also improved, with the EBIT margin for the fiscal first quarter expanding by 30 basis points to 24.5% from 24.2% in the previous quarter. This improvement underscores TCS's operational efficiency and strategic focus on high-margin services. Aarthi Subramanian, Executive Director-President and Chief Operating Officer, noted a shift in client focus towards AI-driven solutions. "Across industries, clients are increasingly shifting their focus from use case-based approach to ROI led scaling of AI. We are investing across the AI ecosystem including infrastructure, data platform solutions, AI agents, and business applications," she said.
Strategic investments and workforce development
TCS's strategic investment in AI is expected to drive future growth and enhance its competitive edge. The company reported a net headcount addition of 6,071 employees during the quarter, bringing the total number of employees with higher-order AI skills to 114,000. Milind Lakkad, Chief HR Officer, emphasized the importance of talent development at TCS. "In this quarter, our associates invested 15 million hours in building expertise in emerging technologies, enabling them to lead the transformation journey for our customers. It is gratifying to note that TCS now has 114,000 people with higher order AI skills," he added.
The company's focus on AI and digital transformation has been a key driver of its growth. TCS has secured several notable digital transformation deals, including a quantum algorithm development with IBM, enterprise data transformation for a large Canadian bank, and cloud operations for a global energy equipment manufacturer. These deals highlight TCS's ability to deliver innovative solutions that meet the evolving needs of its clients.
In addition to its focus on AI, TCS has reorganized its Cloud unit to strengthen its hybrid cloud proposition. The company has seen continued traction in Cloud Contact Centre transformation, legacy modernization, and Cognitive Enterprise Network Services. Cybersecurity has also been a robust area of growth, with more customers focusing on identity and access management, managed detection and response, and governance, risk, and compliance services.
