TCS Q1FY27 Results Highlights: Net profit up 4.62%, deal wins at $9.5 billion & 9,279 employees added

In FY26, the TCS announced dividends amounting to Rs 110 per share, with its dividend yield of 4.66%. This comprised three interim dividend payments of Rs 11 per share, a special dividend of Rs 46 per share and a final dividend of Rs 31 per share.

In FY25 the company had paid a total of Rs 126 per share in dividends. 

TCS reported a growth of 2% YoY in constant currency terms for its North America market, while the IT major's Latin America market declined 2.1% YoY. Its Asia Pacific market grew 2.5% YoY.

Commenting on the Q1FY27 results, Sudeep Kunnumal, Chief HR Officer of TCS said, “This quarter, we completed annual salary increments for all associates globally and aligned salary structures with the new India Labour Code requirements. We continue to invest in AI infrastructure, next-generation skill development platforms, to enable our people to be futureready, while fostering a workplace where every associate feels safe, valued, trusted and empowered to grow”.

Speaking on the financial statement, Samir Seksaria, Chief Financial Officer of TCS said, “In Q1, we rolled out annual wage hikes, strengthened our partnership ecosystem, and targeted investments to enhance long-term competitiveness. We remain focused on building, acquiring, or partnering for AI-led capabilities while maintaining disciplined execution, industryleading profitability and return ratios”.

TCS secured total contract value (TCV) of $9.5 billion during Q1FY27. The company won an $800 million AI-led business transformation deal with global industrial company SKF, along with multi-million-dollar agreements with ServiceNow and a Europe-based Fortune Global 50 company.

The company also expanded partnerships with Google Cloud, Anthropic, Mistral, Siemens Energy and ABB, while signing several AI-led transformation deals across sectors including utilities, healthcare, retail and financial services.

Commenting on the company's financials. Aarthi Subramanian, Executive Director of - President and Chief Operating Officer of TCS said, “Q1 was characterized by strong growth across several services. We won multiple AI-led transformation deals with our dual commitment to AI-led optimization as well as innovation-led outcomes. "

She added, "These wins validate our approach to AI-led efficient ITOps, accelerated Software Engineering and Modernization, AI-first process redesign and implementation of SaaS solutions and Autonomous GBS. We signed strategic partnerships with Anthropic and Mistral expanding our AI ecosystem”.

TCS operating margin stood at 24% and net margin at 19.2%, excluding exceptional items.

The company's BFSI segments registered a 2.4% YoY growth in constant currency terms, while its consumer business declined by 1.2% for Q1FY27. The company's energy, resources & utilities segments registered the highest growth.

TCS Workforce strength stood at 593,798 in Q1FY27. TCS workforce at the end of FY26 was 584,519, the company reported in their Q4FY26 release. This signifies an increase of 9,279 employees

LTM Attrition (IT Services) stood at 13.6% .

TCS reported employee Costs at Rs 42,137 crore

K Krithivasan, Chief Executive Officer and Managing Director of TCS, said “Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macro-economic headwinds. We delivered a strong order book of $9.5 billion, including a marquee AI-led transformation deal with SKF, while continuing to add clients across key revenue bands and scaling our AI business to a $2.6 billion annualized revenue run rate."

He added, "As customers accelerate investments in AI, modernization, cybersecurity, sovereign cloud and platform simplification, our strong deal conversion, improving client mining and expanding ecosystem partnerships position TCS well to translate opportunity into sustained growth”.

On sequential basis, the profit of TCS declined 2.69% as compared to Q4FY26. Revenue. However, increased slightly by 2.23% QoQ.

The company's total expenses for the April-June quarter stood at Rs 42,137 crore, rising 11.7% YoY from Rs 37, 715 crore posted in the year-ago period.

The IT major's consolidated net profit was reported at Rs 13,349 crore against Rs 12,760 crore increasing nearly 5% YoY.

TCS reported revenue from the operations at Rs 72,275 crore, up 13.93% YoY from Rs 63,437 crore in reported in Q1FY26.

The company's consolidated revenue from operations for Q1FY27 was posted at Rs 72,275 crore, rising 14% YoY from Rs 63,437 crore reported in the same quarter last year.

TCS reported net profit at Rs 13,349 crore in Q1FY27, up 4.62% year-on-year (YoY) from Rs 12,760 crore reported in Q1FY26.

TCS's board of directors have declared an interim dividend of Rs 12 per equity Share of RE 1 each of the Company.

"The interim dividend shall be paid on Friday, July 31, 2026, to the equity shareholders of the Company, whose names appear on the Register of Members or in the records of the Depositories as beneficial owners of the shares as on Wednesday, July 15, 2026, which is the Record Date fixed for the purpose," the company added.

Midcap IT firms are expected to outperform large-cap peers in Q1FY27. Brokerage firm Anand Rathi expects midcap IT services companies to report constant currency (CC) revenue growth of around 0.6% quarter-on-quarter (QoQ), largely unchanged from the previous quarter.

Read more: Persistent, Mphasis, Coforge Q1FY27 preview: Can Midcap IT firms outperform large cap peers?

Share price of TCS ended Thursday's trade flat at Rs 2,049.50 on NSE. Over the past one week the IT major's stock has delivered a return of more than 2%, while over the past one month it has fallen by over 5%.

Over the past three months the stock has TCS has declined by 19%, and over the past six months it has fallen 35%.

Axis Securities Equity Research estimate revenue to grow 14.5%, , EBIT to grow 16.6%, and PAT to grow 11.9% year-on-year, across their IT coverage universe.

"The IT services sector is expected to remain soft in Q1FY27, primarily due to macro headwinds, continued AI investments, and the impact of the West Asia conflict, resulting in steady deal wins and lower discretionary spending, particularly in the US and Europe," Axis Securities Equity Research noted.

Yes Securities believes TCS and Wipro will face the sharpest margin compression from wage hikes and AI-led pricing pressure. "Margins to decline to 24.1% due to annual wage hikes and continued investments in AI capabilities," Yes Securities noted.

The brokerage estimates 0.7% quarter-on-quarter (QoQ) growth in constant currency terms, led by the BFSI and life sciences segments.

Kotak Institutional Equities expects EBIT margin to decline by 160 bps on a sequential basis, “wage revisions rolled out across the organization and revenue shortfall will offset the benefit of Rupee depreciation.”

The brokrage estimates TCS to report total contract value (TCV) of $8-9 billion, lower year-on-year (YoY) due to pricing compression, while sequential moderation is expected to reflect seasonal trends.

Read more: TCS, Infosys, Wipro, HCLTech Q1FY27 earnings preview: What top brokerages expect from IT giants

The share price of TCS is trading flat in the intraday trading session today. The stock is trading at Rs 2,046.05. The stock has seen a sharp correction during the first quarter, falling 20.86% in the past three months. On a year-to-date basis, TCS shares have fallen 36.63%.

According to Systematix Research, TCS may report flat sequential revenue at $7.62 billion, reflecting 0.3% constant currency (CC) growth and a 0.1% decline in dollar terms quarter-on-quarter(QoQ). "Deal TCVs expected to be healthy around $ 10 bn," Systematix research noted. Net profit is estimated at Rs 13,517 crore, down 1.5% QoQ but up 5.9% year-on-year.

Systematix research also noted that growth is expected to be supported by steady international demand, particularly from the BFSI and consumer segments. The brokerage expects EBIT margin to decline by around 100 basis points sequentially to 24.3% due to wage hikes, although currency tailwinds may partly offset the impact.

Nomura expects TCS to report a muted Q1FY27, with revenue remaining flat sequentially in constant currency terms as macro uncertainty and the Middle East conflict continue to weigh on client spending. The brokerage estimates TCS will post revenue of $7.61 billion, down 0.1% quarter-on-quarter(QoQ) in dollar terms but up 2.6% year-on-year.

"We expect EBIT margin to drop 100 bps QoQ due to the impact of salary hike partly offset by currency and other initiatives

Nomura expects PAT to fall 1.5% sequentially to Rs 13,517.7 crore. Investors will closely watch the company's commentary on discretionary spending, AI-led demand, cost optimisation projects, the BFSI vertical, the impact of the Middle East conflict, and updates on restructuring plans.

Q1FY27 is usually a strong quarter for IT companies, but this time the earnings story is expected to be different. JM Financial said that management commentary during the Q4FY26 earnings season suggests a slower-than-expected start to FY27, driven by disruptions arising from the Middle East conflict and ongoing AI-led pricing deflation.

“Q1 is likely to be weaker than initially anticipated… Margin trajectory is likely to be relatively stable, supported by currency tailwinds, despite competitive intensity and AI-driven deflation,” JM Financial noted.

“Sentiment may remain soft if earnings downgrades continue versus expectations. Hence, we maintain a cautious stance on the sector,” JM Financial added.

Read more: TCS to Infosys: Why wage hikes, AI disruption signal a ‘perfect storm’ for tech giants in Q1FY27

The IT major will consider the declaration of an interim dividend for Q1FY27, if announced the record date for the same has been set for July 15. The company is yet to disclose the dividend amount for its interim dividend payout of Q4FY26.

TCS had declared a final dividend of Rs 31 per share in April. Prior to which, the company had paid a With special dividend of Rs 46 per share in January and an interim dividend of Rs 11 for the previous three quarters. 

Brokerages expect the June quarter to remain challenging for the information technology sector amid weak client spending and continued uncertainty in global markets.

According to Kotak Institutional Equities, “We believe that Q1FY27 will be weak on revenues, impacted by the West Asia crisis and elevated productivity pass-throughs in managed services contracts.”

The brokerage also said, “TCS will likely report flat revenues, while Infosys will likely underwhelm at 1% organic growth qoq.”

Also Read: TCS shares down 40% in 1 year: Can Q1 earnings spark a recovery?

Trading near its 52-week low mark of the circuit on NSE, the stock of TCS fell 2% in the intraday session ahead of its Q1FY27 result. Over the past one month, the IT major's share price has decreased by nearly 6%.

While looking at the longer time frame, the company's stock has slipped around 36%. So far this year, the share price of TCS has fallen by 36%.

JM Financial expects TCS to report flat revenue growth, with wage hikes impacting margins.

"We expect TCS to report 0.2% CC QoQ growth. A -30 bps cross-currency impact translates to a change of -0.1% in dollar terms," JM Financial noted.

The IT firm is expected to report deal wins of $8 billion–10 billion, while margins are expected to decrease by 150 bps sequentially.

Rupee depreciation and operational efficiencies are tailwinds for the sector. However, wage hikes and investments in the business are headwinds.