The Tata Consultancy Services and Infosys walked into FY27 with solid deal wins and stable margins, but the numbers and commentary from their April conference calls pointed to a tougher operating reality. TCS delivered steady sequential growth and maintained its industry-leading margins, while Infosys reported a sequential decline in revenue and issued a cautious FY27 growth guidance of 1.5%-3.5% in constant currency.
The common thread across both companies was not demand weakness alone, but pricing pressure as AI-led productivity gains began getting passed on to clients. Growth is still present, pipelines are intact, but revenue conversion is slower and margin expansion remains limited despite operational discipline.
TCS vs Infosys: Revenue growth trends show divergence despite strong pipelines
Tata Consultancy Services reported Q4FY26 revenue at Rs 70,698 crore, up 9.6% YoY from Rs 64,479 crore in Q4FY25 and 5.4% QoQ. In contrast, Infosys reported Q4FY26 revenue at $5.04 billion, down 1.2% QoQ from $5.10 billion while increasing 4.1% YoY.
In constant currency terms, TCS grew 1.2% QoQ in Q4FY26, marking its third consecutive quarter of sequential growth, while Infosys declined 1.3% QoQ after near-flat growth in Q3FY26.
Meanwhile, deal pipelines remained strong, with TCS reporting total contract value of $12 billion in Q4FY26, up 29% QoQ from $9.3 billion, while Infosys reported large deal TCV of $3.2 billion, down 33.3% QoQ from $4.8 billion, with a book-to-bill ratio of 0.6x.
K Krithivasan, Chief Executive Officer and Managing Director, TCS, said, “We delivered a strong 1.2% sequentially on a constant currency basis, in the backdrop of intensifying geopolitical conflicts and macro-economic uncertainty. Our order book performance was also very strong in Q4, with $12 billion in TCV including three mega deal wins.”
Salil Parekh, Chief Executive Officer, Infosys, said, “Large deals were very good, $14.9 billion for the full year, $3.2 billion for the fourth quarter. The full year was 28% larger than it was the previous year.”
TCS vs Infosys: Margins stay stable but pricing pressure limits expansion
TCS reported EBIT margin at 25.3% in Q4FY26, up from 25.2% QoQ and 24.2% YoY, while full-year FY26 margin stood at 25.0% compared to 24.3% in FY25.
Infosys reported EBIT margin at 21.0% in Q4FY26, down from 21.2% QoQ, with full-year FY26 margin at around 21.0%.
Additionally, Infosys maintained FY27 EBIT margin guidance at 20%-22%, while TCS did not provide formal guidance but brokerages expected margins to remain near 25% in FY27.
Nilanjan Roy, Chief Financial Officer, Infosys, said, “We have maintained resilient margins while investing significantly in AI and talent development.”
Krithivasan said, “We expect to continue to reinvest bulk of the gains from currency and internal cost efficiencies into building our AI capabilities and strengthening partnerships.”
Moreover, brokerage commentary indicated that productivity-led gains are being passed on to clients, which has limited incremental margin expansion despite operational efficiencies.
TCS vs Infosys: Dividend payout remains strong
TCS recommended a final dividend of Rs 31 per share for FY26, taking total FY26 dividend to Rs 110 per share.
Infosys declared a final dividend of Rs 25 per share for FY26.
Additionally, brokerage estimates showed that TCS dividend yield stood at around 5.1% in FY26 and was expected to increase toward 6.9% in forward periods. Infosys dividend yield stood at around 3.9% in FY26 and was expected to rise toward 5.5%-5.8% over FY27-FY28.
While TCS maintained higher absolute payouts, Infosys balanced dividend distribution with reinvestment in AI capabilities and acquisitions.
TCS vs Infosys: AI-led pricing pressure defines the new operating normal
Infosys guided FY27 revenue growth at 1.5%-3.5% YoY in constant currency, compared with 3.1% growth in FY26.
Salil Parekh, Chief Executive Officer, Infosys, said, “Our revenue growth guidance for the financial year 2027 is 1.5%-3.5% growth year-over-year in constant currency terms.”
Parekh further said, “AI-led initiatives are seeing increasing momentum, particularly around productivity, automation, and platform-driven modernisation.”
At the same time, brokerage commentary stated that AI productivity benefits are being passed on to clients, compressing pricing in existing contracts and affecting revenue growth.
K Krithivasan, Chief Executive Officer and Managing Director, TCS, said, “AI projects have started moving from proof of concepts to large projects, and enterprises are focusing on modernisation, cloud migration and AI-led transformation.”
TCS vs Infosys: Q4FY26 Snapshot
| Metric | TCS | Infosys |
|---|---|---|
| Revenue (Q4FY26) | Rs 70,698 crore | $5.04 billion |
| QoQ Growth | +5.4% | -1.2% |
| YoY Growth | +9.6% | +4.1% (CC) |
| CC QoQ Growth | +1.2% | -1.3% |
| EBIT Margin (Q4FY26) | 25.3% | 21.0% |
| QoQ Margin Change | +10 bps | -20 bps |
| FY26 EBIT Margin | 25.0% | ~21.0% |
| Deal Wins (Q4FY26) | $12 billion | $3.2 billion |
| QoQ Deal Growth | +29% | -33.3% |
| Book-to-Bill | Not disclosed | 0.6x |
| FY27 Growth Guidance | Not guided | 1.5% – 3.5% (CC) |
| Dividend (FY26) | Rs 110/share | Rs 25/share (final) |
| Dividend Yield (Est.) | ~5.1% → 6.9% | ~3.9% → 5.8% |
| Headcount (Q4FY26) | 5,84,519 | 3,28,594 |
| QoQ Change | +0.4% | -2.6% |
| AI Revenue Contribution | ~7% | Not disclosed |
Krithivasan added that AI contributed around 7% of TCS revenue, indicating increasing scale but also intensifying competition on pricing.
TCS vs Infosys: Sector demand trends
TCS reported Energy and Utilities growing to 6.1% QoQ in Q4FY26 from lower growth in earlier quarters, while Consumer Business grew to 2.8% QoQ and BFSI remained stable at 0.1% QoQ.
Infosys reported Financial Services declining to negative 2.1% QoQ in constant currency, while Hi-tech grew to 2.7% QoQ.
Parekh said, “We are seeing more growth in next year in financial services, energy, utilities, services, resources vertical.”
Krithivasan said BFSI clients continued to prioritise core modernization, cloud migration, and AI-led productivity programs.
Demand remained centred around efficiency-led spending rather than discretionary investments.
TCS vs Infosys: Workforce trends Infosys reported headcount declining to 3,28,594 in Q4FY26 from 3,37,000 in Q3FY26, down 2.6% QoQ.
TCS reported headcount increasing to 5,84,519 in Q4FY26 from 5,82,163 in Q3FY26, up 0.4% QoQ but declining 4% YoY.
Additionally, Infosys reported utilisation declining to 83.0% in Q4FY26 from 84.1% in Q3FY26, while attrition stood at 12.6%.
TCS reported improved revenue per employee, though productivity gains were largely passed on to clients.
TCS vs Infosys: Brokerages maintained positive stance but moderated expectations
Motilal Oswal maintained ‘Buy’ on TCS and set a target price of Rs 3,000, implying around 16% upside. JM Financial maintained ‘Add’ on TCS and revised the target price to Rs 2,730 from Rs 2,660 earlier, implying around 5.4% upside.
Nomura maintained ‘Buy’ on TCS and increased the target price to Rs 2,930 from Rs 2,840 earlier, implying around 13.2% upside.
For Infosys, Motilal Oswal maintained ”Buy” with a target price of Rs 1,450, implying around 17% upside.
Nomura maintained ‘Buy’ on Infosys and increased the target price to Rs 1,640 from Rs 1,630 earlier, implying around 32.2% upside.
JM Financial maintained ”Buy” on Infosys and revised the target price to Rs 1,500 from Rs 1,525 earlier, implying around 20.9% upside.
Jefferies maintained ‘Hold’ on Infosys and reduced the target price to Rs 1,235 from Rs 1,290 earlier.
Conclusion
TCS and Infosys entered FY27 with strong deal pipelines, stable margins, and steady dividend payouts. At the same time, both companies faced slower growth, tighter pricing, and rising competition in AI-led deals. TCS maintained stronger execution and margin leadership, while Infosys balanced cautious guidance with stable profitability. The operating environment pointed to steady margins but slower revenue conversion, where deal wins remain strong but pricing discipline and client cost optimisation define the pace of growth.
Disclaimer: This article provides a comparison of corporate earnings and market analysis for informational purposes only and does not constitute a recommendation to buy, sell, or hold any securities. Given the inclusion of specific brokerage price targets and dividend projections, readers are advised to consult a SEBI-registered investment advisor before making any financial decisions. Past performance of these companies is not a guarantee of future market results or returns.
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