India’s largest IT services company, Tata Consultancy Services (TCS), has reported 5.3% YoY growth in operating revenue during the quarter ending March 2025 to ₹64,479 crore as compared to ₹61,237 crore in the same quarter of the previous fiscal year.
The total revenue of TCS (including non-operating revenue) went up 5% to ₹65,507 crore in Q4 from ₹62,394 crore a year ago. The profit after tax (PAT) of the company, however, went down by 1.7% to ₹12,293 crore during Q4 as compared to ₹12,502 crore in Q4 of the previous fiscal year.
| Financials | Q4 FY25 (₹ Cr) | Q4 FY24 (₹ Cr) | YoY Change |
| Operating revenue | 64,479 | 61,237 | 5.3% |
| Total revenue | 65,507 | 62,394 | 5.0% |
| PAT | 12,293 | 12,502 | -1.7% |
Source: Company filings.
Coming to the annual financial performance, TCS posted 6% growth in revenue from operations to ₹2.55 lakh crore in FY25 in contrast to ₹2.41 lakh crore recorded in the financial year 2024. The total revenue (including non-operating revenue) of the company stood at ₹2.59 lakh crore during the year.
The annual profit after tax rose 5.9% to ₹48,797 crore in FY2024-25, against ₹46,099 crore booked in the previous financial year. The company attributes the growth to its strong order book.
| Financials | FY25 (₹ Cr) | FY24 (₹ Cr) | YoY Change |
| Operating revenue | 255,324 | 240,893 | 6.0% |
| Total revenue | 259,286 | 245,315 | 5.7% |
| PAT | 48,797 | 46,099 | 5.9% |
Source: Company filings.
In Q4, TCS applied for 267 patents and granted 235 during the period. To date, the company has applied for 8,816 patents and has been granted 4,820 patents. It has a presence in 55 countries and 180 service delivery centres globally. Following the results, the company has announced that pay a dividend of ₹30 per share, subject to approval at the annual general meeting. To view past dividend payouts of TCS, visit here.
Despite the growth, TCS share price remained somewhat flat at ₹3,238, as per Google Finance data, 0.26% lower than the previous close. Let’s find out the reasons.
Despite the growth, what went wrong for TCS?
Weak financial results: Though TCS has reported 5.3% and 6% growth in revenue during Q4 and FY25, respectively, the company missed the estimates of analysts. The IT giant was expected to clock ₹64,741 crore revenue and ₹12,546 profit during the Q4 FY25.
The Q4 revenue growth of 5.3% is also the lowest YoY growth in FY25. For context, TCS recorded 5.4%, 7.6%, and 5.6% growth in the first three quarters of FY25.
Additionally, this is the first time in the past few years that TCS’s profit growth went negative. In the first three quarters of FY25, the company YoY quarterly growth was recorded at 9%, 5%, and 5%, respectively.
Decline in collections from North America: North America is the largest market for TCS, which largely forms around 50% of its revenue. Its growth in the geography fell by 1.9% and 1.8%, respectively, in Q4 and FY25.
Tariff uncertainties: The global uncertainties about tariffs in the US and the globe also forcing the clients to cut outsourcing budgets.
How does TCS make money?
In Q4 FY25, TCS made the most of its revenue from Banking, Financial Services, and Insurance verticals. For context, the company offers digital transformation, banking solutions, and risk management services to banks, financial institutions, and insurers. The company made 6.6% of its operating revenue from this vertical.
TCS cornered 17% of revenue from telecom and media companies for offering network transformation, content management, and digital platform services. While 15.74% of revenue was collected for providing retail solutions, customer experience management, and supply chain digitization services to consumer businesses.
| Revenue verticals | Q4 FY25 (₹ Cr) | Q4 FY24 (₹ Cr) | YoY Change |
| Banking, Financial Services and Insurance | 24,257 | 22,759 | 6.6% |
| Manufacturing | 6,395 | 6,137 | 4.2% |
| Consumer Business | 10,146 | 9,891 | 2.6% |
| Communication, Media and Technology | 11,022 | 10,291 | 7.1% |
| Life Sciences and Healthcare | 6,491 | 6,758 | -4.0% |
| Others | 6,168 | 5,401 | 14.2% |
| Total | 64,479 | 61,237 | 5.3% |
Source: Company filings.
TCS offers clinical data management and healthcare IT solutions to pharmaceutical companies and healthcare providers via its Life Sciences and Healthcare vertical, which accounted for around 10% of the collections.
Moreover, the company also provides smart manufacturing solutions, supply chain optimization, digital engineering, and other services.
TCS revenue contribution by geographies
TCS generated 50% of its revenue from the Americas (North America and Latin America), 31.1% from Europe (UK and Continental Europe), 8.1% from Asia Pacific, 8.4% from Indian, and the remaining from MEA, during the last quarter of the financial year 2025.
| Geography | Q4 FY25 | Q4 FY24 | YoY Growth | FY25 | FY24 | YoY Growth |
| Americas | ||||||
| North America | 48.2% | 50.0% | -1.9% | 48.2% | 51.1% | -1.8% |
| Latin America | 1.8% | 2.0% | 4.3% | 1.9% | 2.0% | 6.0% |
| Europe | ||||||
| UK | 16.8% | 16.8% | 1.2% | 16.8% | 16.5% | 4.0% |
| Continental Europe | 14.3% | 14.6% | 1.4% | 14.3% | 14.9% | 0.7% |
| Asia Pacific | 8.1% | 7.8% | 6.4% | 8.0% | 7.8% | 6.8% |
| India | 8.4% | 6.7% | 33.0% | 8.6% | 5.6% | 62.6% |
| MEA | 2.4% | 2.1% | 13.2% | 2.2% | 2.1% | 11.2% |
| Total | 100.0% | 100.0% | 2.5% | 100.0% | 100.0% | 4.2% |
Source: Company filings.
TCS delays salary increments, adds 6,433 employees in FY25
Part of the Tata Group, TCS has decided to postpone the employee salary hikes for 2025 to a later date due to a volatile business environment and the slowdown in key markets like North America.
Despite this, the company kept the hiring momentum steady with adding 6,433 employees during FY25, including 625 in Q4. At the end of FY25, TCS has a total headcount of 6,07,979 employees.
| Total Employee Base | ||
| Quarter | Headcount | Change |
| Q3-FY24 | 603,305 | - |
| Q4-FY24 | 601,546 | -1,759 |
| Q1-FY25 | 606,998 | +5,452 |
| Q2-FY25 | 612,724 | +5,726 |
| Q3-FY25 | 607,354 | -5,370 |
| Q4-FY25 | 607,979 | +625 |
Source: Company filings.
Conclusion
The IT giant of India, TCS, recorded a 5.3% and 6% quarter and annual growth, respectively. However, the company still couldn’t manage to generate enough revenue to meet the market estimates. The slow growth and muted profits were led by global uncertainties, especially in its key market, North America, which contributes more than a half. Following this, the company has decided to postpone the salary hikes of employees for 2025, however, it continued to hire new talents. TCS primarily competes with Infosys, HCL Technologies, and Wipro, which are yet to announce their quarterly results.
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