TCS Q4 Revenue Misses Estimates Amid Weak North American Demand and Declining IT Budgets
Tata Consultancy Services (TCS), India’s largest IT services provider, reported lower-than-expected Q4 revenue, mainly due to sustained weakness in its key North American market.
Q4 Financial Results Miss Analyst Expectations
TCS posted a 5.3% increase in consolidated revenue, reaching ₹644.79 billion (approximately $7.49 billion), but still missed analyst estimates of ₹647.58 billion, according to LSEG data.
Net profit declined 1.69%, falling to ₹122.24 billion, compared to expectations of ₹126.54 billion.
U.S. Market Pressure Impacts Growth
The company continues to face challenges in the U.S., its largest revenue-generating region, as clients reduce discretionary spending. Analysts cite growing tariff-related uncertainty as a key factor limiting corporate IT budgets across America.
Deal Wins and Segment Performance
TCS recorded deal wins worth $12.2 billion this quarter, a drop from $13.2 billion in the same quarter last year.
While emerging markets drove growth for the second straight quarter, verticals like consumer business, life sciences, healthcare, manufacturing, and media & communications saw a year-on-year decline.
The banking, financial services, and insurance (BFSI) sector, TCS’s largest vertical, posted 2.5% revenue growth.
Executive Outlook and Market Sentiment
TCS CFO Samir Seksaria commented, “We delivered solid profitability and cash flows despite a very challenging macro environment.”
The firm’s results reflect broader concerns in the Indian IT industry, with global tech giant Accenture recently warning of slowed spending and no major client budget increases.
IT Stocks Under Pressure
Following the earnings report, TCS shares declined 1.4%, while the Nifty IT Index dropped over 2%, continuing a downward trend that began after the announcement of reciprocal tariffs by U.S. President Trump. The index has seen a 10.4% decline since then.
Looking Ahead
TCS is the first major Indian tech company to release results this earnings season. Infosys, HCLTech, Wipro, and Tech Mahindra are set to report in the coming weeks.
As macroeconomic pressures continue, the industry remains cautious about near-term growth in the North American IT services market.
