Result-Analysis-Elite-Wealth.

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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    Stock Details
    Market Cap. (Cr.) 11,90,640
    Equity (Cr.) 362
    Face Value 1
    52 Wk. high/low 4592/3056
    BSE Code 532540
    NSE Code TCS
    Book Value (Rs) 260.08
    Sector IT – Software 
    Key Ratios
    ROCE (%): 64.41
    ROE (%): 52.94
    TTM EPS: 136.19
    P/BV: 12.65
    TTM P/E: 24.16
    D/E 0.09

    Result Highlights:

    • The company reported revenue from operations of Rs 63,437 crore in Q1 FY26, reflecting a YoY growth of 1.3% compared to Rs 62,613 crore in Q1 FY25. However, on a QoQ basis, revenue declined by 1.62% from Rs 64,479 crore in Q4FY25.
    • TCS has reported EBIT of Rs 15,514 crore in Q1 FY26, registering a YoY growth of 0.47% compared to Rs 15,442 crore in Q1 FY25. However, EBIT declined by 0.56% on a QoQ basis from Rs 15,601 crore in Q4 FY25. The EBIT margin stood at 23.83% in Q1 FY26, down from 24.29% in Q1 FY25 on a YoY basis, but marginally higher than 23.82% in Q4 FY25.
    • It has reported a Profit After Tax of Rs 12,819 crore in Q1 FY26, representing a YoY increase of 5.9% compared to Rs 12,105 crore in Q1 FY25. On a QoQ basis, PAT also rose by 4.3% from Rs 12,293 crore in Q4 FY25. The growth in PAT was primarily driven by an increase in other income.
    • The company reported a Last Twelve Months (LTM) attrition rate of 13.8% in Q1 FY26, an increase from 13.3% in Q4 FY25, indicating a slight rise in employee turnover during the quarter.
    • TCS reported an order book Total Contract Value of $9.4 billion in Q1 FY26, marking a decline from $12.2 billion in Q4 FY25. Of the total, North America contributed $4.4 billion, while the BFSI and Consumer Business segments accounted for $2.5 billion and $1.6 billion, respectively, indicating continued traction across key markets and verticals despite the sequential dip.
    • In Q1 FY26, BFSI remained the highest revenue contributor at 32%, up 1% from 30.9% in Q1 FY25. Consumer Business accounted for 15.6%, Life Sciences & Healthcare 10.2%, Technology & Services 8.4%, Communication & Media 5.8%, Manufacturing 8.7%, Energy, Resources & Utilities 5.9%, and Regional Markets & Others 13.4%. Notably, Technology & Services and BFSI segments recorded growths of 1.8% and 1%, respectively, while all other segments experienced a decline compared to the previous year.
    • In Q1 FY26, North America contributed 48.7% to the company’s revenue, reflecting a 2.7% year-on-year decline. The UK and Continental Europe accounted for 18.0% and 15.0%, respectively, both registering slight decreases. Asia Pacific’s contribution rose 3.6% to 8.4%, while India’s share declined 21.7% to 5.8%.

    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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