Tata Consultancy Services (TCS), India’s biggest IT services firm, is in the spotlight after announcing its financial results for the fourth quarter of FY25. The company’s shares fell more than 1.4% following weaker-than-expected earnings and news that employee salary hikes will be delayed.
TCS reported a net profit of ₹12,224 crore for Q4, down 1.7% compared to the same period last year. Revenue for the quarter rose 5.3% year-on-year to ₹64,479 crore, but both profit and revenue came in below analysts’ estimates. One major factor was a nearly 2% drop in revenue from North America—TCS’s largest market.
Adding to investor concerns was the announcement that the company would postpone its annual wage hikes, which usually take effect in April. Milind Lakkad, the company’s Chief Human Resources Officer, said that hikes are deferred due to economic uncertainties and may be reconsidered later this year depending on how the business environment evolves.
Despite the cautious tone, TCS remains optimistic about its hiring plans. The company still aims to onboard 42,000 freshers from college campuses this year, signaling its long-term confidence in business demand.
CEO K Krithivasan acknowledged that global issues, including possible U.S. tariff pressures, have affected client spending behavior. Many clients are pausing discretionary spending and delaying new project rollouts, especially in the U.S.
While these factors weighed on short-term performance, TCS’s total contract value (TCV) stood strong at $12.2 billion for the quarter and $39.4 billion for the full year. The company said its pipeline of deals remains healthy, even though project execution may be slower than usual in the near term.
On the stock market, the news spooked investors. TCS shares dropped, dragging down the broader Nifty IT index by more than 2%. The sector as a whole has been under pressure, with IT stocks collectively sliding over 10% in recent weeks.
Key Takeaway
TCS may be navigating a tough patch, but its long-term fundamentals look stable. The delay in wage hikes and global uncertainty could affect employee sentiment and short-term investor confidence, but a strong deal pipeline offers some comfort for the future.
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