As the earnings season kicks off, all eyes are on Tata Consultancy Services (TCS), India’s largest IT services company, which is set to report its financial results for the fourth quarter of FY25. Analysts and investors alike are bracing for a subdued performance from the tech giant, as several global and domestic challenges weigh on growth.
What to Expect This Quarter
According to a CNBC TV18 poll, TCS is expected to post a net profit of ₹12,546 crore for the January–March quarter, with revenue estimated at ₹64,741 crore. Operating profit (EBIT) is projected to come in at ₹16,034 crore.
However, analysts aren’t particularly optimistic. Kotak Institutional Equities predicts a marginal 0.3% revenue decline in constant currency (c/c) terms. The dip is attributed to flat international business growth and a $30 million drop in BSNL revenues.
While the depreciation of the rupee could typically provide a margin boost, TCS is expected to face pressure due to increased investments and employee promotions. As a result, margins may remain underwhelming.
Dividend Watch
In addition to the financials, the company’s board is expected to announce a final dividend, which could offer some cheer to long-term investors despite the muted earnings forecast.
Industry-Wide Sluggishness
TCS isn’t alone in facing a challenging quarter. Experts anticipate that most Indian IT companies will report soft earnings for Q4 FY25, largely due to cautious client spending and a weaker deal pipeline.
Global Factors in Play
A key point of interest for market watchers will be the management’s commentary on the deal environment. Concerns over Trump-era tariffs and geopolitical uncertainties remain major headwinds, potentially dampening global IT demand.
TCS Stock Performance
Reflecting investor concerns, TCS shares declined over 15% during the January–March period, making it one of the weaker quarters for the stock in recent years.
As TCS prepares to report its numbers, the company’s commentary on future outlook, cost management, and global demand will be closely scrutinized.
