TCS Q2 Results: Profit Falls 1%, Misses Estimates

Tata Consultancy Services Ltd.'s profit fell in the second quarter of fiscal 2025, missing estimates, even as its revenue rose during the period.

Profit of the IT major was down 1.1% at Rs 11,909 crore in the July-September period. This compares to a Bloomberg estimate of Rs 12,543 crore.

The company's revenue rose 2.6% to Rs 64,259 crore, compared to the Bloomberg estimate of Rs 64,186 crore.

• Revenue up 2.6% at Rs 64,259 crore (Bloomberg estimate: Rs 64,186 crore).

• Ebit increased 0.2% to Rs 15,469 crore (Bloomberg estimate: Rs 15,995 crore).

• Margin expanded by 50 basis points to 24.1% (Bloomberg estimate: 24.90%).

• Net profit fell 1.1% to Rs 11,909 crore (Bloomberg estimate: Rs 12,543 crore).

Even as profit fell quarter on quarter, it rose 5% year-on-year. Margins came in at 24.1%, lower than  24.7% recorded in the first quarter, although the company had hoped to inch up. While the revenue growth was in line with market expectations, profit and margins were a miss. 

“We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our growth markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders," K Krithivasan, chief executive officer and managing director of the company, said in a press release.

TCS has cancelled its September quarter earnings press conference and interviews scheduled later on Thursday after the demise of Ratan Tata.

The banking, financial services and insurance, consumer business, life sciences and healthcare sectors saw mere 0.1% YoY growth. Communication and media, technology and services verticals YoY growth dipped 10.3% and 1.9%, respectively. However, manufacturing, energy and resources and utilities verticals registered growth of 5.3% and 7%, respectively. 

In terms of geographies, India region recorded 95.2% YoY growth on the back of BSNL deal. North America dipped 2.1% while Latin America rose 6.8%. 

The company’s Total Contract Value stood at $8.6 billion, sequentially 3.6% higher from $8.3 billion recorded in preceding quarter. However, on a YoY basis, TCV has dipped 34.8%. 

Employee headcount increased by 5,726 employees in the second quarter, bringing the total to 6,12,724, as hiring revived. This is higher than the 5,452 additions made in the preceding quarter. Attrition rate in the second quarter inched up marginally to 12.3% from 12.1% in last quarter. 

“We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for FY26. Our strong talent base and increased learning intensity prepares us well for the complex technology transformations that customers entrust us with," said Milind Lakkad, chief HR officer.

Before the results were announced, TCS shares closed 0.60% lower at Rs 4,227.40 per share, while the NSE Nifty rose 0.07%. In the last 12 months, TCS shares have increased by 16.49%, and 11.96% year-to-date.

Catch all the live updates on q2 results announcements here.