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Informist, Monday, Jan. 12, 2026

 

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--TCS: See order book closing with $38 bln-$39 bln for FY26
--TCS: Don't see more than 10-15 bps impact of labour codes on profitability
--TCS: Optimistic North America will return to better growth
--TCS: Hope to grow better in international markets in FY26 vs FY25
--TCS: Confident BFSI segment will return to growth
--TCS: Overall demand improved in December quarter
--CONTEXT: TCS management's comments in post-earnings concall with analysts
--TCS: AI, data continue to drive growth for us

 

By Sunil Raghu & Madhu Kumar

 

AHMEDABAD/MUMBAI - Tata Consultancy Services Ltd. expects its order book for 2025-26 (Apr-Mar) to close at $38 billion-$39 billion, the company's management said in an analyst call held post the announcement of its December quarter earnings on Monday.

 

"If you look at this year, so far in the first three quarters, our order book is in the range of about 28 to 29 billion dollars. So, if this trend continues, it will be somewhere closer to about 38 to 39 billion for the year, which will be one of the highest", the company's management said. This, they said, will help the company grow in FY27 as well. TCS Monday said its order book total contract value during December quarter was at $9.3 billion. "We are optimistic and we'll take every step that's required to see we reach the aspiration of having a revenue better than FY25."

 

The December quarter earnings announced by the IT behemoth show that its business in the Americas had shown modest growth amid concerns over US tariffs, recently announced stringent visa policies, and uncertainty about further policies under President Donald Trump. Revenue from North America, which constitutes almost 49% of the company's top line, rose 0.1% on a trailing basis and 1.3% on year in constant currency terms. Revenue from Latin America was up nearly 5% on quarter and up over 1% on year. In Europe, revenue from the UK declined nearly 2% on a trailing basis and over 3% on year in constant currency terms. For continental Europe, the company's revenue grew over 2% on a trailing basis and over 1% on year basis. The UK constituted about 17% of the company's revenue, while continental Europe accounted for nearly 16%.

 

The company's management said that they are optimistic that North America will return to better growth than before. "...we find that the customers are willing to look at ROA-based decision making in terms of new projects and we also see the decision-making cycle are reduced compared to the past. And the momentum we saw in Q2 (Jul-Sept) continued (in Oct-Dec)." 

 

The management reiterated that with overall demand improving in the December quarter, it sees better growth in the international markets in FY26 compared to what it did in FY25. It said that artificial intelligence and data continued to drive growth for the company, saying that spend and cloud infrastructure, cyber security, data governance and rich computing is on the rise.

 

Other than AI and data, the company also expressed confidence that its core banking, financial services and insurance segment, too, would do better going forward. The BFSI segment grew merely 0.7% on a trailing basis to INR 258.89 billion in the December quarter. However, in constant currency terms, the segment fell 0.4% on quarter. The revenue contribution from the segment constituted nearly 32% of the company's overall top line. "BFSI successfully launched three large-scale core-based modernisation programmes for leading BFSI accounts in Q3, resulting in quicker product launches, strengthened security process, and enhanced operational efficiency," the management said.

 

For consumer business, TCS management said that groups saw a sequential growth led by retail, travel, and hospitality segments, reflecting pockets of resilience and cautious optimism.

 

TCS Monday reported a fall in its bottom line for the December quarter due to one-time costs of INR 33.91 billion from the trailing quarter. The IT behemoth's consolidated net profit fell nearly 12% sequentially to INR 106.6 billion in the December quarter. Without this one-time cost, the consolidated net profit of the company would have been up 6% quarter-on-quarter at nearly INR 141 billion, compared with INR 121.31 billion in the September quarter. Its revenue rose nearly 4% from the previous quarter to INR 670.87 billion from INR 657.99 billion a quarter ago.

 

The key "other" costs that put pressure on the IT behemoth's net profit in the December quarter include statutory impact of new labour codes to the tune of INR 21.3 billion, provision towards legal claim of INR 10.1 billion and restructuring expenses to the tune of INR 2.5 billion. Going forward, the company's management said that they do not see more than 10-15 basis points impact of labour codes on profitability on an ongoing basis.

 

TCS released its quarterly results after market hours. Monday, its shares closed 1% higher at INR 3,239.60 on the National Stock Exchange.  End

 

US$1 = INR 90.15

 

Edited by Deepshikha Bhardwaj

 

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