TCS Navigates Through Revenue Slowdown in Q4

BENGALURU: In a recent earnings conference, TCS CEO K Krithivasan shared insights into the company's performance, highlighting a cautious yet optimistic outlook for the future. Despite crossing the $30-billion revenue milestone in FY25, TCS experienced a noticeable slowdown in growth during the March quarter, with revenues growing by just 2.5%.

FY25 Performance Overview
For the full fiscal year, TCS's revenue saw a 4.2% increase in constant currency, up from 3.4% in the previous year. However, the March quarter told a different story, with growth slowing significantly from 3.6% and 5.5% in the preceding quarters. This deceleration was attributed to reduced discretionary spending and delays in decision-making by clients.

Market and Margin Pressures
The North America market, which constitutes half of TCS's business, witnessed a 1.9% decline in the March quarter and a 1.8% drop for the entire FY25. Additionally, operating margins slightly decreased to 24.2% from 24.5% in the December quarter. Despite these challenges, CFO Samir Seksaria reaffirmed the company's margin guidance at 26-28%.

Looking Ahead
Krithivasan remains hopeful, stating, "We believe in the next few months, this uncertainty should settle, and we should be back in business." With a strong order book and signed deals, TCS anticipates FY26 to outperform FY25, despite current short-term uncertainties.