The Tata Consultancy Services share price is down nearly 3% after the tech major reported its quarterly earnings for the fourth quarter. While the headline profit numbers saw double-digit growth on a year-on-year basis, the street is worried about the subdued growth outlook and margins missing estimates.
TCS Q4: Key concern for the markets
TCS’ higher exposure to application-managed services is also seen as a potential worry, posing risks to its growth amid AI-led deflation. The company also announced wage hikes across all grades. The company indicated that this increment range is likely to hover in mid single-digit levels. It reported Q4FY26 dollar revenue of $7.6 billion, up 1.2% QoQ in constant currency terms, largely in line with most brokerage estimates. FY26 revenue declined 2.4% YoY in constant currency terms.
Nomura on TCS
Nomura raised the target price on TCS to Rs 2,930, from Rs 2,840, implying an upside of 13.2% from the current market price. The brokerage said that strong deal bookings improve growth visibility, and a growth bounce-back is likely in FY27.
TCS’s Q4 FY26 revenue at $7,621 million was marginally ahead of the Bloomberg consensus. Growth included a 40-basis-point inorganic component. International business grew +1.2%.
Based on the deal pipeline and recent deal wins, TCS believes the revenue growth in international markets would be higher in FY27 compared to FY26. The caveat is any significant deterioration in macro or second-order impact from a prolonged war in the Middle East.
“We expect TCS to continue to reinvest the bulk of the gains from currency and internal cost efficiencies into building its AI capabilities and strengthening AI ecosystem partnerships,” said Nomura.
TCS Q4FY26
TCS posted a consolidated net profit of Rs 13,718 crore in Q4FY26, an increase of 29% year-over-year from the previous quarter. Its revenue from operations grew 5.4% sequentially to Rs 70,698 crore.
TCS declared final dividend
The company’s board has proposed a final dividend of Rs 31 per share for FY26. This is subject to shareholder approval at the annual general meeting. For FY26, total shareholder payout was Rs 39,571 crore in the form of dividends.
TCS’s margins held steady throughout the quarter. The operating margin was reported at 25.3%, reflecting a sequential increase of 10 basis points when excluding one-off items. The net margin for the quarter was recorded at 19.4%.
TCS headcount in focus
The total number of employees for FY26 decreased, despite ongoing investments in talent development and AI-driven skills, along with the announcement of salary increases and efforts to maintain hiring momentum in the March quarter.
| Metric | FY25 (Actual) | FY26 (Actual) | Year-over-Year Trend |
| Total Headcount | 6,07,979 | 5,84,519 | -23,460 (3.85% decline) |
| LTM Attrition Rate | 13.3% | 13.7% | +0.4% (Slight increase) |
| Nationalities | 152 | 149 | -3 (Slight consolidation) |
| Learning Hours | 56 Million | 69 Million | +13 Million (23% increase) |
| AI-Trained Staff | 0 | 2,70,000+ | New priority (AI-first shift) |
Compared to the previous year, the workforce declined, with the headcount reaching 584,519 at the close of Q4 FY26, down from 607,979 in Q4 FY25, representing a net reduction of 23,460 employees.
However, the company stated that there was a net headcount addition of 2,356 during the January-March quarter.
TCS share price performance
The share price of Tata Consultancy Services has risen 8% in the last five trading days. The stock price has increased 3% in the past one month and has lost 14.5% in the last six months. Tata Consultancy Services has corrected over 20% in the last one year.
TCS Q3FY26
The information technology company reported a consolidated revenue of Rs 67,087 crore, increasing 4.8% YoY, while net profit fell 14% to Rs 10,657 crore in Q3FY26. Compared to the previous quarter, profit fell by 11.7%, despite a 2% increase in revenue quarter-on-quarter, or 0.8% when adjusted for constant currency.
The company stated that the decrease in profit was primarily due to restructuring costs associated with the rollout of new wage and labour codes, one-off transition expenses, and a Rs 1,010 crore set aside for a legal issue.
Disclaimer: The information provided above includes financial results and brokerage analysis for Tata Consultancy Services (TCS). While Nomura has provided a target price and growth outlook, these should be viewed as market commentary rather than a direct offer or solicitation to trade. Investors are advised to consult a SEBI-registered financial advisor to assess individual risk profiles and financial goals before making investment decisions, as equity market investments are subject to volatility and corporate performance risks.
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