Tata Consultancy Services Limited (TCS) Q1FY26 Result Analysis

Tata Consultancy Services Limited (TCS) is a leading global IT services, consulting, and business solutions organization, delivering both transformational and outsourcing services to enterprises worldwide. As the flagship company of the Tata Group, TCS operates across key markets—including North America, Latin America, the UK, Europe, Asia-Pacific, India, and the Middle East & Africa. With a workforce of over 607,000 professionals across 55 countries and 180 global delivery centers, TCS leverages its deep domain expertise and global scale to drive client success

Result Analysis:  Tata Consultancy Services Limited  (CMP: Rs. 3,291)

Result Update: Q1FY26

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Financial Performance:

Shareholding Pattern:

Particulars (In %)	Q4FY25	Q4FY24
Promoter	71.77	71.77
FIIs	12.04	12.70
DIIs	11.49	11.61
Public and Other	4.63	4.86
Government	0.06	0.06

Management Commentary:

• The company has declared a dividend of Rs 11 per share for Q1 FY26, with the record date set for July 16, 2025, and the payment scheduled to be made on August 4, 2025.
• Krithivasan, CEO and MD, noted that ongoing macroeconomic and geopolitical uncertainties led to demand softness. However, new service lines performed well, and deal closures were strong. He emphasized the company’s continued focus on supporting clients through cost optimization, vendor consolidation, and AI-driven business transformation amid these challenges.
• The company continued to invest in long-term sustainable growth during the quarter. By remaining agile and responsive to a dynamic environment, it delivered stable margins. Its industry-leading profitability and strong cash conversion position the company well to pursue strategic investments and drive future growth.

Outlook:

Despite ongoing macroeconomic and geopolitical headwinds, the company remains confident in its long-term growth prospects. With steady margins, strong cash conversion, and continued investments in innovation, TCS is well-positioned to capitalize on emerging opportunities. The company expects demand to gradually recover as clients increasingly focus on cost optimization, vendor consolidation, and AI-led transformation. Growth in new services and strong deal closures in Q1 FY26 provide a solid foundation for the coming quarters. While near-term demand softness may persist, TCS’s diversified portfolio, strong client relationships, and strategic focus on digital and AI solutions are expected to drive sustainable value creation and long-term shareholder returns. The company reported an TTM EPS of Rs 136.19 in FY25, and the stock is currently trading at a TTM P/E of 24.16x and P/B of 12.65x.

Results:

Particulars	Q1FY26	Q1FY25	Q4FY25	YoY%	QoQ%	FY25	FY24	VAR[%]
Gross Sales	63437	62613	64479	1.3	-1.6	255324	240893	6.0
Net Sales	63437	62613	64479	1.3	-1.6	255324	240893	6.0
Other Income	1660	962	1028	72.6	61.5	3962	4422	-10.4
Total Income	65097	63575	65507	2.4	-0.6	259286	245315	5.7
Total Expenditure	46562	45951	47499	1.3	-2.0	187917	177555	5.8
EBITDA	18535	17624	18008	5.2	2.9	71369	67760	5.3
Interest	195	173	227	12.7	-14.1	796	778	2.3
EBTD	18340	17451	17781	5.1	3.1	70573	66982	5.4
Depreciation	1361	1220	1379	11.6	-1.3	5242	4985	5.2
EBT	16979	16231	16402	4.6	3.5	65331	61997	5.4
Tax	4163	4290	4325	-3.0	-3.7	16910	15864	6.6
Deferred Tax	-3	-164	-216	98.2	-98.6	-376	34	-1205.9
PAT	12819	12105	12293	5.9	4.3	48797	46099	5.9

Segmental Revenue

SEGMENT REVENUE	Q1FY26	Q1FY25	Q4FY25	YoY%	QoQ%
Banking, Financial Services and Insurance	24736	23074	24257	7.2	2.0
Manufacturing	6401	6271	6395	2.1	0.1
Consumer Business	10155	9991	10146	1.6	0.1
Communication, Media and Technology	9436	10794	11022	-12.6	-14.4
Life Sciences and Healthcare	6422	6909	6491	-7.0	-1.1
Others	6287	5574	6168	12.8	1.9

Geographical Revenue

Geography	Q1 FY26	Q1 FY25	YoY% CC grwoth
Americas
North America	49.5	48.7	-2.7
Latin America	1.9	1.9	3.5
Europe
UK	16.9	18	-1.3
Continental Europe	14.4	15	-3.1
Asia Pacific	7.8	8.4	3.6
India	7.5	5.8	-21.7
MEA	2	2.2	9.4

Source: Company website, EWL Research

 

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