You are currently viewing TCS Q1 Results FY26: Net Profit Rises 6% to ₹12,760 Cr; Revenue Misses Street Estimates

TCS Q1 Results FY26: Net Profit Rises 6% to ₹12,760 Cr; Revenue Misses Street Estimates

Prime Highlights

  • Announces 6% YoY jump in Q1 FY26 net profit to ₹12,760 crore, driven by operating margin expansion to 24.5%.
  • Declares ₹11 interim dividend; revenue increases modestly to ₹63,437 crore, short of market estimates.

Key Fact

  • Group contract value of $9.4 billion, up 13.2% YoY, although with sequential weakness.
  • Record date: July 16; payment date: August 4.

Key Background

India’s largest IT services provider Tata Consultancy Services (TCS) announced Q1 FY26 results with a consistent profit expansion in the face of a difficult macroeconomic environment. Net profit in the quarter was ₹12,760 crore, up 6% year-on-year from the past corresponding quarter, better than expectations. Operating margin also expanded to 24.5%, a 30 basis points quarter-on-quarter improvement, driven predominantly by operational efficiencies and lack of wage increases during the quarter.

Revenues in the quarter were up 1.3% over the year at ₹63,437 crore but missed street estimates on account of ramp-ups of deals slowing down more rapidly than anticipated and the key verticals being soft. Four of the six industry verticals saw revenue decline. Financial services and technology services reported in isolation. The slowing down of the BSNL deal also impacted the revenue trajectory.

Total contract value (TCV) in Q1 stood at $9.4 billion, a stunning 13.2% year-on-year growth. It was lower than the $12.2 billion TCV in the previous quarter due to restraint in client expenses, especially from North America and Europe in the background of geopolitics and economic uncertainty. Long-term demand for cloud, AI, and digital transformation remains to be viewed by TCS, with strong triumphs in manufacturing and BFSI segments.

In a resolute message to shareholders, the board announced an interim dividend of ₹11 per share. TCS also made it clear that though wage increases are delayed, recruitment plans are intact and AI-driven efficiencies won’t translate into layoffs. The company has already trained more than 114,000 associates in GenAI skills, indicating its future-readiness intent.

In spite of the top-line headwinds, TCS’s executional hard work, strong order book, and digital innovation drive keep it well positioned for sustainable growth in FY26.