Mumbai, April 9 The country's largest IT services company, TCS, reported a 12.22 per cent increase in its net profit for the March quarter, reaching Rs 13,718 crore, driven by improved profit margins.
For the fiscal year 2025-26, its profit after tax increased by 1.35 per cent to Rs 49,210 crore, compared to Rs 48,553 crore in FY25.
TCS's Chief Executive and Managing Director, K Krithivasan, stated that TCS is entering the new fiscal year with positive momentum, fueled by new deal signings, and asserted that most of the challenges it faced recently are now behind it.
Addressing an analyst call, Krithivasan said the impact of the West Asia crisis will be limited to the challenges faced by clients in the travel and transportation sector and those based in the Gulf region.
From a headcount perspective, the company added 2,356 jobs in Q4, bringing the total number of employees to 5,84,519 as of March 31, 2026, marking the first quarter of net addition after two consecutive quarters of decline.
In FY26, the overall workforce decreased by 23,460.
Krithivasan said the company's plan to lay off 2 per cent of its workforce, or about 12,000 people, has been completed.
Meanwhile, Chief Financial Officer Samir Seksaria said the "restructuring" costs are limited to Rs 1,300 crore, announced at the end of the December quarter.
TCS is the first company in the USD 315 billion Indian IT sector to report its earnings for the fiscal year 2025-26, which saw a deepening of artificial intelligence (AI) technologies and subsequent concerns on employee intensity in the sector, which produces some of the best quality jobs in the economy.
In the reporting quarter, its revenue from operations jumped 9.64 per cent to Rs 70,698 crore from the Rs 64,479 crore in the year-ago period, while the overall revenue increased by 4.58 per cent to Rs 2.67 lakh crore.
The operating profit margin expanded to a four-year high of 25.3 per cent in the March quarter, up from 24.2 per cent in the year-ago period.
Seksaria attributed the expansion to a variety of factors, including currency depreciation, and added that the 26 per cent target will be achieved in a "longer term".
"While the macroeconomic headwinds continue, we see sustained customer confidence in technology investments, which positions us well for the opportunities ahead," Krithivasan said.
The company signed new deals worth USD 12 billion in the three months to March, led by North America at USD 5.4 billion and the banking, financial services, and insurance business at USD 2.8 billion.
On the AI front, the company disclosed that its revenue reached USD 2.3 billion on an annualised basis in Q4, which is over 6 per cent of its overall revenue.
The voluntary attrition stood at 13.7 per cent at the end of the quarter, and the company's Chief Human Resources Officer, Sudeep Kunnumal, said it will be reverting to implementing salary hikes across the organisation from April 1 onwards.
Krithivasan attributed the change to the clarity it has on deal momentum and demand, and added that the senior employees were in the 20 per cent of the staff left out in the last increment cycle, who will get their dues this year.
Seksaria said that top performers will receive double-digit salary increases, and that overall increments can impact margins by 1.50-2 per cent.
The company's board has proposed a final dividend of Rs 31 per share, which takes the overall payout to Rs 110 per share.
The company's scrip closed 1.09 per cent up at Rs 2,587.75 apiece on the BSE on Thursday, against a 1.20 per cent correction on the benchmark.
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