TCS Q4 results: Net profit slips 1.7% to ₹12,224 crore, misses estimates

Revenue for the company grew 5.3 per cent at Rs 64,479 crore for the Q4 FY25. Sequentially the firm's revenue was up marginally by 0.79 per cent

India’s largest information technology (IT) services player, Tata Consultancy Services (TCS), on Thursday reported a 1.7 per cent decline in net profit to ₹12,224 crore for the fourth quarter of 2024-25, down from ₹12,434 crore in the year-ago period. The drop came amid rising uncertainty, delays in decision making, and project ramp-downs.

 

The company’s revenue for the quarter rose 5.2 per cent to ₹64,479 crore. Sequentially, revenue grew marginally by 0.79 per cent. 

TCS’ performance fell short of Bloomberg estimates of ₹12,766 crore net profit on a revenue of ₹64,848 crore. 

For the full year, net profit rose 5.8 per cent to ₹48,553 crore, while revenue grew 6 per cent to ₹255,342 crore. The company crossed the $30 billion revenue milestone for the first time. 

 

  TCS Managing Director and Chief Executive Officer K Krithivasan acknowledged the impact of the ongoing US tariff discussions. “We had spoken about improving market sentiments and early signs of revival in discretionary spends in January, but this was not sustained due to the discussions around tariffs. We are observing delays in decision making and project ramp-ups with respect to discretionary investment,” he told the media after the firm announced its Q4 results.

 

The consumer and automotive verticals are expected to be most affected by the tariffs. However, the BFSI (banking, financial services, and insurance) segment showed positive momentum. Krithivasan, however, said the company managed to grow sequentially, despite these concerns.

 

The total contract value (TCV) for the quarter was $12.2 billion, the second-highest ever. In Q3, the TCV was $10.2 billion, while Q1 and Q2 recorded $8.3 billion and $8.6 billion, respectively. For the full year, TCS reported a TCV of $39.4 billion.

 

The performance in Q4 was similar to that in previous quarters, where growth had largely been driven by regional or emerging markets. Major markets, such as the US and Europe, continued to be soft.

 

India, a key growth driver in earlier quarters, also saw a slowdown, as the initial phase of the BSNL deal will come to an end in Q1 of FY26. Sequentially, India declined by 13.2 per cent. However, on a year-on-year basis, India grew 33 per cent.

 

“Growth is below estimates, but the decline in India revenue is worse than expected, which shows a faster than anticipated ramp-down in BSNL revenue. The numbers aren’t bad once we adjust for this. India revenue is down by about $111.8 million quarter-on-quarter (Q-o-Q). While margins are lower, that is due to rising employee costs, suggesting high-quality hiring, headcount hasn’t increased much,” said an analyst who did not wish to be named.

 

However, the management reaffirmed that FY26 would be better than FY25, although “we may face short-term uncertainties”. “No region would want to continue with such global uncertainty for a very long period of time. I believe some certainty will emerge soon,” said Krithivasan.

 

West Asia & Africa, Asia Pacific, and Latin America grew by 13.2 per cent, 6.4 per cent, and 4.3 per cent, respectively. However, North America declined by 1.9 per cent year-on-year. Within Europe, the UK grew 1.2 per cent, and Continental Europe 1.4 per cent.

 

Among verticals, the BFSI segment grew 2.5 per cent Y-o-Y and 1.3 per cent Q-o-Q. Growth was also seen in energy, resources and utilities (4.6 per cent YoY), and technology & services (1.1 per cent). However, the consumer business declined 0.2 per cent Y-o-Y and 0.7 per cent sequentially, while life sciences & health care and manufacturing contracted by 0.8 per cent and 0.5 per cent Q-o-Q, respectively. 

 

TCS said it was seeing strong demand in artificial intelligence (AI) and generative AI-led deals. “Over 580 AI for business engagements were delivered this quarter,” said Krithivasan.

 

Operating margins for the quarter stood at 24.3 per cent, down 30 basis points sequentially.

 

FY25 dividend at ₹45,612 cr

 

TCS announced a final dividend of ₹30 per share for Q4, taking the total dividend for FY25 to ₹126 per share. The dividend will be paid out after the firm’s annual general meeting towards the end of May 2025.

 

With this, TCS’ total dividend payout for FY25 would be ₹45,612 crore, significantly higher than the FY24 dividend of ₹26,426 crore. In FY24, the total dividend per share had been ₹73. Of this, Tata Sons, which has a 71.7 per cent stake in TCS, will see its gross dividend payout at ₹32,722 crore for FY25.

 

(With inputs from Avik Das)