Tata Consultancy Services Ltd - 532540 - Announcement under Regulation 30 (LODR)-Earnings Call Transcript

TCS/SE/10/2026-27

April 14, 2026

National Stock Exchange of India Limited Exchange Plaza, C-1, Block G, Bandra Kurla Complex, Bandra (East) Mumbai - 400051 Symbol - TCS

Mumbai - 400001 Scrip Code No. 532540

BSE Limited P. J. Towers, Dalal Street,

Dear Sirs,

Sub: Transcript of the earnings conference call for the quarter and year ended

March 31, 2026

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the transcript of the earnings conference call for the quarter and year ended March 31, 2026, conducted after the meeting of Board of Directors held on April 9, 2026, for your information and records.

The above information is also available on the website of the Company: www.tcs.com.

Thanking you,

Yours faithfully,

For Tata Consultancy Services Limited

Yashaswin Sheth Company Secretary ACS 15388

Encl: As above

9th Floor Nirmal Building Nariman Point Mumbai 400 021 Tel 91 22 6778 9595 Fax 91 22 6630 3672 e-mail corporate.office@tcs.com website www.tcs.com Registered Office 9th Floor Nirmal Building Nariman Point Mumbai 400 021 Corporate Identity No. (CIN): L22210MH1995PLC084781

Tata Consultancy Services Limited Financial Results Q4 & Full Year FY 2026 Conference Call April 09, 2026,19:00 hrs IST (08:30 hrs US ET)

Moderator:

Ladies and gentlemen, good day and welcome to the TCS Earnings

Conference Call. As a reminder, all participant lines will be in the listen-

only mode and there will be an opportunity for you to ask questions after

the presentation concludes. Should you need assistance during the

conference call, please signal an operator by pressing star then zero on

your touchtone phone. Please note that this conference is being

recorded.

I now hand the conference over to Ms. Nehal Shah, Head of Investor

Relations at TCS. Thank you and over to you.

Nehal Shah:

Thank you, operator. Good evening and welcome everyone. Thank you for

joining us today to discuss TCS's financial results for the fourth quarter

and full year FY2026 that ended on March 31st, 2026. This call is being

webcast to our website and an archive including the transcript will be

available on the site for the duration of this quarter.

The financial statements, quarterly fact sheets and press releases are

also available on our website. Our leadership team is present on this call

to discuss our results. We have with us today Mr. K Krithivasan, Chief

Executive Officer and Managing Director.

K Krithivasan:

Hi everyone.

Nehal Shah:

Ms. Aarthi Subramanian, Chief Operating Officer and Executive Director.

Aarthi Subramanian:

Good evening, everyone.

Nehal Shah:

Mr. Samir Seksaria, Chief Financial Officer.

Samir Seksaria:

Hello everyone.

Page 1 of 34

Nehal Shah:

And Mr. Sudeep Kunnumal, Chief HR Officer.

Sudeep Kunnumal: Hello everyone.

Nehal Shah:

Our management team will give a brief overview of the company's

performance followed by a Q&A session. As you are aware, we don't

provide any specific revenue or earnings guidance, and anything said on

this call which reflects our outlook for the future or which could be

construed as a forward-looking statement must be reviewed in

conjunction with the risk that the company faces.

We have outlined this risk in the second slide of the quarterly fact sheet

available on our website and email out to those who have subscribed on

our mailing list.

With that, I would like to turn the call over to Krithi.

K Krithivasan:

Thank you, Nehal.

Good day everyone and thank you for joining us today.

I would like to open with five key messages for the quarter and the year:

1. First, about Q4 – We are very pleased to announce third consecutive

quarter of sequential growth. We delivered a strong 1.2%

sequentially on a constant currency (CC) basis, in the backdrop of

intensifying geopolitical conflicts and macro-economic uncertainty.

This momentum was broad based across major markets, with North

America growing 1.4% QoQ, UK growing 2.4% QoQ and Europe

growing 1.0% QoQ in CC. Most of the industry segments also grew.

Our order book performance was also very strong in Q4, with $12

billion in TCV including three mega deal wins from Marks and

Spencer, a leading telecom operator in the UK, and a leading

American healthcare & pharmacy retailer. This underscores the

Page 2 of 34

strength of our five pillar strategy and our AI-led positioning across

services.

2. Second key message is on our client metrics – You will see from the

factsheet

that every revenue band saw healthy additions this

quarter after a gap of about 2 years, which speaks to the early signs of

stability and growth returning to our mid-sized and large accounts. The

number of accounts where we generate more than $100 million

annually increased by 4 QoQ, bringing the total to 66; we added 3 more

clients in the $50 million+ band, bringing the total to 139; and 14 more

clients in the $1 million+ band bringing the total to 1,397 from

last quarter.

3. Third message is on the announcement of salary increments. We

have announced annual salary increments for our eligible associates

across all grades, effective April 1.

4. Fourth is the momentum we see in our AI Services, which

continued to accelerate impressively, standing at US$2.3 billion on an

annualized basis.

5. Lastly, the promise we see in our HyperVault Business – which has

made significant progress this quarter on its journey to build out 1 GW

of capacity. This includes winning customer commitments, land

parcel finalizations and partnering agreements. We are actively

engaging across the full ecosystem of—hyperscalers, semiconductor

companies, and model providers, while TCS is the integration partner

across infrastructure, engineering, and AI-led services. Demand

signals remain strong and are translating into structured engagements

and commitments, positioning TCS at the forefront of this build-out.

As we progress, this infrastructure layer is forming the foundation of

TCS’s full spectrum play from infrastructure to intelligence.

Page 3 of 34

Coming to our full year performance, even though our FY 2026 revenue

declined by 2.4% in constant currency, we delivered a strong $40.7B in

TCV including 5 mega deals. We maintained a strong focus on execution

to deliver an operating margin of 25%. This is the highest operating margin

achieved in the last 4 years.

As enterprises navigate increasing complexity across technology,

operating models, and business transformation, the role of trusted

System Integrators has become even more vital. Clients are looking for

partners who can bring deep technology excellence, strong enterprise

and industry context, and take end-to-end accountability with confidence

on outcomes and ROI. In FY26, TCS was uniquely positioned to meet

these expectations through sustained investments in AI led engineering, a

highly skilled and scalable talent base, differentiated solutions, and a

strong partner ecosystem. This has translated into the major highlights I

talked about earlier, broad based client additions across revenue bands,

strong TCV, and continued momentum in large deals, with clients showing

greater willingness to commit to long term, multiyear, multimillion dollar

partnerships reflecting the trust they place in TCS to deliver certainty and

value at scale over extended transformation journeys.

I will now invite Samir, Aarthi and Sudeep to go over different aspects of

our performance during the quarter.

I will step in later to provide more colour on the demand trends we are

seeing in our key verticals and our outlook for the next year. Over to you,

Samir.

Samir Seksaria:

Thank you, Krithi. Good day to all.

I will start with the commentary on the recent quarter and then proceed to

the Full year numbers.

Page 4 of 34

In

the fourth

quarter

of financial

year 2026,

our

revenue

was ₹70,698 crore, which is a quarter-on-quarter growth of 5.4%. In dollar

terms, revenue was $7.621 billion, a quarter-on-quarter growth of 1.5%.

In constant currency, we had a sequential revenue growth of 1.2%.

Our Q4 operating margin stood at 25.3%, a sequential increase of 10

basis points.

During the quarter, we saw an improvement in realizations driven by

continued focus on value-led delivery. Currency was also supportive

during the quarter, providing a translation tailwind. These factors

contributed to a benefit of around 40 basis points and 110 basis

points respectively.

Consistent with the ‘Build–Partner-Acquire’ strategy we shared at our

Analyst Day, we consciously reinvested these tailwinds back into

strengthening our capabilities and growth engines.

• Under ‘Build’, we saw higher external consultants’ cost of 40 basis

points, to capture the demand and to ensure delivery timelines and

quality were protected while we continue to scale internal

capabilities.

In parallel, we made targeted interventions in critical talent,

certifications, upskilling and creation of niche delivery pods. These

investments are aimed at building a scalable, future-ready AI delivery

model that straddles the entire stack across our Infrastructure to

Intelligence strategy layout. Also, the ingoing impact of the India wage

code is included. Together these two accounted for an impact of 40

basis points.

• Under ‘Partner’, we stepped up investments in ecosystem

partnerships, reflected in multiple announcements such as OpenAI,

Page 5 of 34

AMD and ServiceNow made during the quarter. These investments are

focused on industrialising AI solutions, increasing cross-sell

opportunities, and improving speed-to-value for clients through

deeper hyperscaler and platform collaboration.

We also increased go-to-market activity, with higher participation in

client events, showcases and industry forums. This is directly linked to

expanding

demand

pipeline

and

improving

conversion

by demonstrating our AI and platform-led offerings. Together, these two

accounted for a margin impact of 50 basis points.

• Finally, aligned to ‘Acquire’, we incurred integration-related

investments of approximately 10 basis points, as we embedded

acquired capabilities into our operating model. This included talent

alignment, platform integration, go-to-market enablement and delivery

readiness, all aimed at accelerating synergy realisation and scaling new

offerings.

Net margins for Q4 were 19.4%, and our EPS grew 12.2% YoY.

Our accounts receivable stood at 74 DSO in dollar terms for Q4, down 2

days sequentially.

Our cash conversion this quarter continues to be strong, exceeding

100% of our net profits. Net cash from operations was $1.6 billion, which

is 106.7% of our net income.

Invested funds at the end of the period stood at $5.3 billion.

Coming to the full year FY26, our revenue was ₹267,021 crore, which is

a growth of 4.6% on a YoY basis. In dollar terms, the reported revenue

was $30.017 billion, a decline of 0.5%. In Constant currency terms,

revenue declined 2.4% YoY.

Page 6 of 34

For FY26, our operating margin was 25%, an expansion of 70 basis

points over the prior year, and at a 4-year high.

The operating margin for the year excludes a few one-off items recognised

during this year. These exceptional items relate to severance-related

expenses, legal provisions, and the impact of changes in India wage

code.

Net margins for FY26 were 19.8% and our EPS grew 8.8% YoY.

Our effective tax rate for the year was 24.6%.

Going forward, we will continue our investments to maximise growth. Our

operational rigor will continue to focus on optimizing margins, robust

cash conversion and strengthening the balance sheet.

We remain firmly committed to returning substantial free cash flow to

shareholders through a consistent and shareholder friendly dividend

policy, while prudently expanding investments under the ‘Build-Partner-

Acquire’ framework to strengthen long-term growth.

The Board has recommended a final dividend of ₹31 per share, taking the

total dividend for the year to ₹110.

I would now like to invite Aarthi.

Aarthi Subramanian:

Thank you, Samir. Good evening to all of you.

FY26 was a pivotal year for enterprise AI adoption across industries. For

the first time since the advent of GenAI in late 2022, the shift from

experimentation to scaled AI deployment showed a marked improvement

last year. AI became a core part of our every customer conversation and

solutioning, creating a tailwind for enterprise adoption. In Q4, our

annualized AI revenues surpassed $2.3 billion, driven by the accelerated

deployment of AI solutions across industries.

Page 7 of 34

We experienced strong deal momentum across new services in

Enterprise Transformation, Digital Engineering, and Cloud Modernization.

Our HyperVault business has made significant progress since the

announcement in October 2025.

Last quarter, I spoke about our two-pronged approach to engaging deeply

with our customers on AI. One, to help them ‘Get ready with AI’, and two,

to partner with them to ‘Lead with AI’. Let me share more detailed updates

on both these areas.

Get AI Ready

While our customers want to accelerate AI adoption, their current

enterprise stack lacks the readiness for what it takes to scale. We are

working with our customers to address this gap by upgrading their

infrastructure to be scalable and secure, modernizing their core

applications and setting up modern data foundation. Significant part of

the technology spend is being invested in these areas.

Let me share a few examples:

• TCS modernized mission-critical crew management systems using

Generative AI for a European Airline. We reverse-engineered complex

legacy systems to reconstruct the core business logic embedded in

these systems. This modernization was powered by Google Gemini

platform. The airline now has a scalable foundation to build new-age

crew operations solution.

• For a car rental company in US, we executed a complex, high-stakes

legacy data warehouse migration, moving over 20 terabytes of

mission-critical data to a Modern Data platform. This program

decommissioned their legacy systems delivering an estimated $2.5

Page 8 of 34

million in savings but more importantly, it established a scalable data

foundation for them to Get Ready for AI.

Lead with AI

To help our customers implement AI in their context, we have created an

AI acceleration playbook – Innovate with AI, Build with AI and Scale with

AI. This year, we deployed this playbook across a significant number of

our customers to solve high-value business problems in rapid

deployment cycles of 12-16 weeks.

• For a leading utility company in the US, we conducted CxO-level AI

immersion programs to identify challenges that can be best solved

with AI. We also built their Enterprise AI Platform which provides a

secure scalable foundation to industrialize AI adoption.

Physical AI deployment is also gaining traction in industrial sector. Digital

twins, computer vision, quadruped-based solutions are driving

efficiencies, throughput and safety.

• For an electronics manufacturer, in their fabrication facilities, we

are integrating NVIDIA Omniverse-driven digital twins with

autonomous quadruped-based inspection systems. This Physical

AI solution is driving better construction accuracy and

proactively identifies safety hazards.

Services transformation

Redefining every service line is central to our Five-pillar strategy. TCS has

created a services re-design framework which we call our ‘Human + AI’

Service autonomy model. This model integrates service line specific

industry leading tools which are integral to delivering value in the

customer context.

Page 9 of 34

This is resonating well with our customers as it provides a well-defined

framework for consistent deployment across the enterprise. We are

taking AI-led re-designed services proactively to our existing customers

and new prospects.

In last 2 years, AI model capabilities have evolved tremendously and

rapidly. Yet there is a gap in enterprises realizing the true potential of

these technologies. One of the challenges our customers face is that they

have invested in these tools but have not yet reaped the expected

productivity benefits. Our goal is to systematically help our customers

address these gaps with our ‘Human + AI’ Service autonomy model.

• For a retailer in UK, we deployed the AI-Engineering framework

with agents through the software lifecycle from translating

unstructured requirements into structured specifications as well

as executing spec-driven coding, testing, and deployment. Our

‘Human+AI’ approach accelerated software delivery and reduced

the deployment cycle time by about 40%.

Business process services is becoming a fast adopter of Agentic AI. We

are working with multiple customers on their AI-led GBS transformation.

• For a steel major, TCS proactively deployed AI agents in

procurement bid management process, resulting in order to

invoice cycle reducing from 28 days to under 10 days.

In FY26, all next-gen services delivered strong growth across industries

and markets, backed by our continued investments in AI, talent, and

innovative solutions.

Page 10 of 34

Partnerships

In FY26, we invested significantly in strengthening our AI partnerships.

This includes Enterprise partners, Hyperscalers, Deep Tech AI native

partners and domain specific partners.

In Q4, we forged several strategic partnerships that have expanded

our joint collaboration, this includes a partnership with ServiceNow,

Google Cloud and ABB.

With Open AI, we announced a partnership spanning multiple high-

impact areas - empowering Tata group employees with ChatGPT

enterprise, building industry specific agents, Joint go to market initiatives

and creating a state-of-the-art AI infrastructure.

HyperVault

Finally, I would like to provide an update on TCS HyperVault.

Our engagements with hyperscalers and frontier AI model companies

have moved beyond early exploration into design alignment, security

frameworks, site due diligence, and commercial structuring. We see the

demand converging around large, anchor AI workloads in the 100–200 MW

range per customer.

HyperVault has aligned a deep partner ecosystem, including Tata Power,

Tata Projects, Tata Communications as well as GE, Honeywell, ABB,

Siemens, and many of our customers to cover EPC, power, cooling,

controls, network and security.

Some of the key announcements we made this quarter are:

• We have partnered with Open AI to build 100 MW capacity, with an

option to scale to 1 GW.

Page 11 of 34

•

In collaboration with AMD, we are combining their world class

“Helios” rack-scale AI architecture with Tata group synergies to

create high density AI capacity in India.

• We signed an MOU with ABB to strengthen collaboration across IT

infrastructure and applications, digital and industrial AI initiatives,

data centres, and other emerging technologies.

In summary, FY26 saw a good momentum on AI and new services. As we

move into FY27, we will continue to accelerate deployment of our five-

pillar AI strategy. We are well positioned to support our customers with a

deep knowledge of the enterprise context that we possess and our ability

to integrate AI into the customer business and technology landscape to

create customer value.

Thank you. I would now like to hand over to Sudeep.

Sudeep Kunnumal: Thank you, Aarthi. Good evening, all of you.

At the outset, I would like to thank all our employees and their families

stationed in West Asia for their utmost dedication and resilience during

these tough times.

All our employees and their families in the Middle East are safe and we

are in constant touch with them providing the necessary support.

At the end of March 2026, our global headcount stood at 584,519, with

associates from 149 nationalities of whom 35.2% are women.

We have announced Annual increments to all eligible employees across

grades, effective April 1, with top performers getting double digit increase.

We are focused on building a future-ready organization by strategically

hiring both fresh graduates and experienced professionals. Our

Page 12 of 34

recruitment efforts have been concentrated on individuals with expertise

in AI, data, Enterprise Solutions, software engineering, cloud,

cybersecurity, and digital engineering.

In FY26, we have also hired over 750 employees with deep advisory and

consulting expertise.

We stepped up our investments in talent development initiatives as well.

•

In FY26, a total of 69 million learning hours has been completed,

and 5.2 million competencies have been attained by our associates.

• Over 270,000 associates now possess advanced proficiencies in AI

and machine learning.

TCS demonstrates its commitment to innovation by being its own

"customer zero", adopting and refining AI technologies across internal HR

practices before deploying them externally.

Within the human resources function, we are embracing AI as follows:

• Nearly half of internal resource allocations occur through the internal

Talent Market Place which uses AI driven recommendations to match

demand and supply.

• Our GenAI-powered Learning Coach platform has helped over

100,000 TCS employees improve their proficiency through targeted,

role-specific learning.

• Our GenAI enabled Interviewer accelerates hiring with technical

assessments, while our AI recruitment platform enhances post-offer

engagement to answer very specific queries.

• The AI assistant provides instant multilingual, contextual HR policy

support, improving employee experience.

Page 13 of 34

We have further strengthened our position as Employer of Choice

globally and are pleased to have been recognized as an Enterprise-wide

Top Employer for the 11th consecutive year by the Top Employers

Institute - reflecting our commitment to foster an inclusive and engaging

workplace where our people can thrive and grow.

I would now like to invite you back Krithi.

K Krithivasan:

Thank you, Sudeep.

Scaling Enterprise AI adoption requires organizations to address

technology debt, data readiness, and operating model complexity. AI will

enable clients to rapidly move from end consumer feedback to demand

identification to code.

With every tech cycle, clients have realized far greater value and TCS has

scaled its business. With AI, TCS aspires to be the World’s largest AI led

Tech Services company. This aspiration is powered by:

• Capitalizing on AI led renewals, vendor consolidation and cost

optimization deals resulting in market share gains.

• Using new age services & adjacencies that enable enterprises

to ‘Get ready for AI’

• Becoming a full stack AI services player – Infrastructure to

Intelligence; thereby, delivering maximum ROI to clients on their AI

investments through end-to-end industry value chain

reimagination; and

• Building new revenue streams such as building AI infrastructure

In FY26, we made good progress across all the above opportunities.

The strong order book closures were led by Vendor consolidation, AI led

modernization, scaling AI across the enterprise, Digital core and data

Page 14 of 34

platform modernization, Operating Model transformation, and regulatory

compliance.

Let me now share specific details of our industry-wise performance

during the quarter.

• The BFSI vertical continued to grow this quarter.

o Client demand across BFSI remained technology-led and outcome focused through Q4, shaped by heightened macro and geopolitical

volatility. Increased uncertainty around interest rates, inflation, and

central bank actions influenced client sentiment, resulting in cautious

investment decision-making. Despite this backdrop, BFSI clients

continued to prioritize core and legacy modernization, data estate

transformation, cloud migration, and scaled AI/GenAI deployments,

productivity led operating model transformation and vendor

consolidation. Spending patterns increasingly shifted from

experimentation to industrialized business driven transformation, with

strong emphasis on cost discipline, regulatory resilience, and measurable

outcomes.

• Our Consumer Business Group saw another quarter of good growth,

supported by market share gains and emerging pockets of technology

conviction, resilience and guarded optimism. Retail globally and TTH

in UK/EMEA led the growth, while CPG and TTH North America

segments declined.

o Enterprises continued to tightly align spending to initiatives delivering near-term efficiency, cost control, and operational resilience, with

growing emphasis on vendor consolidation, technology simplification,

legacy modernization, and selective AI and GenAI adoption.

Page 15 of 34

o CBG had 2 mega deal wins this quarter, which helped propel its TCV to an all-time high. One of the two mega deals was the renewal and

expansion of our services to Marks & Spencer, a customer of TCS, for

well over a decade. The deal is a testimony to the deep trust and

strong partnership between the two organizations. The other mega

deal is with a leading American healthcare and pharmacy retailer,

another longstanding and trusted strategic partnership with TCS, that

we are proud to have retained.

o Clients are appreciating TCS’s track record of successfully delivering transformation programs, more than ever. An excellent

example is as follows:

o A leading American healthcare and pharmacy retailer partnered with TCS to modernize its mission-critical claims processing platform.

Operating at a massive scale - processing over 5 Mn prescriptions

daily - the platform underpins core pharmacy operations including

claims validation, accumulation and tracking of a patient's out-of-

pocket (OOP) expenses, ordering, replenishment and reporting. As

prescription volumes continued to rise, the legacy architecture began

to limit performance, real-time visibility and scalability, creating

operational bottlenecks across the ecosystem.

o Leveraging deep domain expertise and contextual knowledge, TCS

reimagined process flows and led the comprehensive cloud native re-

architecture of the platform. The transformation introduced event

driven processing, complex multisystem integrations and world-class,

enterprise grade security to ensure resilience and compliance. This

has enabled near real-time processing, compressing claims cycles

from 48 hours to just 12 hours, data-driven decisioning leveraging AI,

and autoscaling to support growing prescription volumes and rapid

Page 16 of 34

onboarding of new entities, positioning the client for sustained future

growth.

• Life Sciences and Healthcare saw marginal growth this quarter:

o Healthcare payers are managing rising costs and growing friction with providers due to preauthorization and claims issues. Key priorities

include affordability, transparency, simplicity, and better patient

experiences. Organizations are focusing on data marketplaces, cyber

resilience, and AI to boost productivity, while regulatory changes add

to compliance costs and administrative burdens, prompting selective

modernization focused on efficiency.

o The pharmaceutical industry is streamlining pipelines and adopting AI to tackle growth and pricing pressures. Companies in the Americas

and UK/EU are focusing on efficiency through vendor consolidation,

tech modernization, and enterprise-wide transformation.

• The Manufacturing vertical also saw good growth this quarter despite

the macro uncertainties and the impact to the global supply chains.

o Client demand across Manufacturing remained cautious in Q4,

shaped by macroeconomic uncertainty, tariff volatility, recalibration of

EV demand, and continued restraint in capital expenditure across

Automotive, Industrial, and Chemicals. Customers prioritized

near-term cost optimization and operational resilience, with sustained

focus on AI-led productivity, including predictive maintenance and

quality automation, alongside ERP and cloud modernization to

streamline operations and improve reliability.

• The Technology and software segment saw reasonable growth this

quarter given the environment.

Page 17 of 34

Client demand in Q4 remained disciplined amid a challenging

o macro environment, shaped by heightened geopolitical tensions,

tariff-related uncertainty, and increasingly stringent manufacturing and

data-sovereignty requirements. Customers continued to prioritize cost

rationalization to fund a strategic pivot towards AI-led transformation,

with spend focused on vendor consolidation, GCC expansion, and

structural efficiency, and the resulting savings reinvested into scaling AI

across core operations and product portfolios. Incremental investments

were also directed towards digital sovereignty and supply-chain

resilience.

• CMI saw a modest decline this quarter, but we are witnessing

promising signs of a rebound in IT spending in CMI.

Telecommunications companies are advancing their journeys to

expand into adjacent businesses while simultaneously enhancing the

efficiency of their core operations. This strategic shift is paving the way

for growth and innovation.

o Momentum remains strong in securing large deals within the telecommunications sector. We have signed our first mega deal in

CMI this quarter - a significant expansion of its long-standing

partnership with a leading UK-based telecom operator. This five-year

contract will see TCS lead the operator's comprehensive IT

transformation journey for its consumer business, leveraging advanced

AI, Cloud, and Digital Engineering capabilities. The expansion, built

on the strength of years of trusted partnership and demonstrated

delivery, will see TCS take end-to-end responsibility for running the

entire IT systems of the operator's consumer base and become its

strategic technology partner, consolidating the entire landscape

previously spread across multiple service providers.

Page 18 of 34

• ERU demonstrated robust growth this quarter. Within ERU, the Energy

& Resources segment performed well, led by supply chain

modernization initiatives gathering momentum in the near term.

However, the Utilities segment is experiencing stress, and significant

cost optimization opportunities are opening up.

In summary, even in a year marked by global uncertainty, we have

demonstrated resilience, discipline, and the ability to lead through

complexity. Our performance in FY26 reflects not just strong execution,

but enduring trust—from clients who are committing to longer-term

partnerships, and from associates who continue to drive transformation

at scale. With a robust order book, expanding client relationships across

revenue bands, accelerating AI momentum, and foundational

investments like HyperVault, we are building the next phase of TCS with

conviction. As enterprises increasingly seek partners who can deliver

certainty, accountability, and outcomes end-to-end, TCS stands

exceptionally well positioned combining technology excellence, deep

contextual knowledge, and scale to help our clients navigate change and

create sustainable value. We enter the new year with confidence, clarity

of purpose, and an unwavering focus on delivering growth with resilience

and trust.

With this, I will now open the line for questions.

Moderator:

Thank you very much. We will now begin the question-and-answer

session. We'll take a first question from the line of Sudheer Guntupalli

from Kotak Mahindra AMC. Please go ahead.

Sudheer Guntupalli: Hi Krithi, thanks for the opportunity. My first question, is there any

foreseeable change in quantity or quality of client inquiries or even

bookings around agentic AI implementation post first week of Feb when

Anthropic announced a string of agentic AI launches?

Page 19 of 34

K Krithivasan:

Sudheer, definitely clients are curious to know about expanding

capabilities of all the models. And they also want to leverage their models

to achieve both productivity as well as business value chain re-

imagination, but is it because post Anthropic, I won't say that. As the

model capability improves, there'll be more interest in seeing how they

can leverage.

Aarthi Subramanian:

Client interest and demand actually increases with new

capabilities coming out of the model providers.

Sudheer Guntupalli:

Fair enough. The second question, many of these frontier model

companies, they're just announcing a new project or agent, which may be

in their development pipeline, but not yet launched. The latest example

being Claude Mythos. Is this in any way leading to client’s sort of deferring

their existing IT spends to maybe wait and watch, once the product

actually hits the shelf, maybe a few months or years down the line?

K Krithivasan:

We have not seen that, Sudheer. It's been, as I said, our clients are quite

interested in leveraging it. They know this will be constantly evolving. And

there is no major benefit in waiting for the next best model to come. So,

clients are willing to invest now, and we have been helping them with the

overall philosophy that their architecture is built for change. We are

helping them in building that architecture so that they can exploit and

leverage the models as they come in.

Sudheer Guntupalli:

Sure, sir. Last question from my side. How do we think of FY27

growth, given the exit run rate and where our order booking is and also

high expectations around some AI-led deflation?

K Krithivasan:

As we mentioned, we have a good order book getting into FY27. We have

strong three mega deals booked in this quarter. And as we also described,

most of the industry verticals, we see a positive momentum and our new

Page 20 of 34

age services are also gaining traction. So overall, we are getting into our

next year with a lot of positivity and confidence.

Sudheer Guntupalli:

That’s it from my side.

K Krithivasan:

Thank you, Sudheer.

Moderator:

Thank you. We'll take our next question from the line of Kumar Rakesh

from BNP Paribas. Please go ahead.

Kumar Rakesh:

Hi, good evening and thank you for taking my question. My first question

was around what you were just talking about, that getting into FY27, we

are exiting at a healthy growth. We are also exiting with a bulk of multiple

mega deals and across verticals as well, it seems demand has started

improving, at least growth for TCS has started improving. Would you call

out and say that we should start getting back to 3- 4% sort of a growth in

the international business where we used to be or better than that or the

recovery is going to be far more gradual this year?

K Krithivasan:

Kumar, I don't want to put a number, but I would say that, again, as I was

telling Sudheer, we are quite positive about FY27, quite positive about the

international growth.

Kumar Rakesh:

Got it. Thanks for that and my second question was around margins, so

SG&A in the second half has been elevated. So, is this the new normal we

should now start looking at or it should normalize back to below 15%

where it used to be?

Samir Seksaria:

As you know, we have been investing on the ‘Build-Partner-Acquire’

strategy and incremental investments on partnerships, on recruitment

and training, on the new businesses are all reflecting on the SG&A. Some

part of it will see an elevated increase, both in the absolute amount as

well as in percentage of revenue.

Page 21 of 34

Kumar Rakesh:

Got that. And just for a clarification, our restructuring is done or there's

more cost associated to that which has to come through?

Samir Seksaria:

So if you look at Q4, we have not called out any one-offs, so it is business

as usual.

Kumar Rakesh:

Yeah. But there is a restructuring charge, which you have booked in the

quarter, right?

Samir Seksaria: We have not called out any one-off for Q4. The combined one-off for the

year is ₹1,300 crores; there are no one offs in this quarter.

K Krithivasan:

But Kumar, just to get the clarity, I will be specific. The restructuring

program that we started, we have completed that program. The program

towards restructuring has been completed.

Kumar Rakesh:

Got it. Perfect. Thanks a lot for that.

Moderator:

Thank you. We'll take our next question from the line of Yogesh Aggarwal

from HSBC Securities. Please go ahead.

Yogesh Aggarwal: Hi. Thanks. Krithi, just firstly on the next few quarters, can we expect the

similar type of seasonality going forward? Because the reason I'm asking

is there's not been much headcount addition, so the typical seasonality of

better first half, does that still work going forward?

K Krithivasan:

We are looking at a regular Q1, regular Q2 that we are used to seeing, and

this is the way we are looking at as we stand now, Yogesh.

Yogesh Aggarwal: No, Krithi, I was asking, so usually the first and the second quarter are

stronger than Q4, right?

K Krithivasan:

That is what I said. We are also expecting a stronger 1H. Our planning

assumption is along those lines only.

Page 22 of 34

Yogesh Aggarwal: Okay, great. And secondly, just going back to this AI stuff. So usually in the

past, you had all these historical relationships and partnerships with

software companies like SAP and all these diamonds, platinum ratings.

Can you talk a little bit about what are these partnerships with the AI

models, especially Anthropic? What is the level of tiering with them? And

does it really matter anymore? Thanks.

Aarthi Subramanian: Yogesh, I think with all the model companies, we are building strategic

partnerships. We have announced with OpenAI, we are already working

significantly with Anthropic and will be announcing strategic partnerships

with them in the near future. We are very closely working with Mistral.

With all model companies, it's extremely important for us to build a

strategic partnership.

But I would say that we are also trying to shape these partnerships

differently than the traditional GTM partnerships of the past. So, we want

to make them 360-degree partnerships. Also because of our investment

in HyperVault, we have a very unique opportunity where they can become

our customers.

You saw the announcement that we made with OpenAI, where there is a

committed capacity of 100 MW and the opportunity to grow that to 1 GW.

So, we are having similar conversations on our opportunities with these

model companies and hyperscalers. So that's one new pillar of strategic

collaboration.

Apart from that, using their products, ChatGPT Enterprise, we made an

announcement, so using Anthropic Claude, so that's the second pillar of

our collaboration. Third is industry specific solutions with them. The

fourth one is very specific GTM motions, which is similar to strategic

partnerships of the past. So that is a pillar, like I said, we are trying to

Page 23 of 34

shape this partnership differently, more deep, more strategic and value

for both.

Yogesh Aggarwal: Got it. Thank you. Thank you so much.

Moderator:

Thank you. We'll take our next question from the line of Nitin

Padmanabhan from Investec. Please go ahead.

Nitin Padmanabhan:

Yeah. Hi. Good evening. Thank you for the opportunity. Krithi,

initially, you mentioned some caution in BFSI during the quarter. I just

wanted your thoughts on how clients are thinking about spending going

forward, considering the macro.

Do you think this ends up like last year where you had the Liberation Day

and we thought we were probably getting into good start, but then you had

all these headwinds. So, in the context of what you see today, what are

the conversations with clients? It would be great to have your perspective

there, maybe across a few key sectors at least.

K Krithivasan:

See, at this time, if you look at our direct impact from the geopolitical

situation, so far has been restricted to Middle East and to some extent

into our travel and transportation industry and we have not seen major

impact in other industries so far.

But Nitin, as you would know, if things continue and if it results in further

supply chain disruption or any other secondary issues, it may have an

impact. But at this time, I think the impact will be limited to our travel and

transportation and probably the work we do in Middle East. We have not

been hearing any other specific concerns from our clients in other

industries or other geographies.

Nitin Padmanabhan:

The caution that you mentioned was very geo specific, it's not a

broad-based caution?

Page 24 of 34

K Krithivasan:

Yes, that's correct.

Nitin Padmanabhan:

That's very helpful. The second is on, from a margin perspective,

how should we think about margins going forward? Because on one hand,

you do have the currency giving you a tailwind and on the other side, you

have to invest on capabilities and multiple other things. So just how

should we broadly think from a margin perspective as we get into the next

year?

Samir Seksaria:

Nitin, we are exiting FY26 at a four-year high on annual margins at 25%.

And we see continued positive momentum. Our focus will be to ensure

growth with profitability, so we'll not be shying away from making the right

investments for ensuring strategic growth.

Stepping into FY27, the immediate headwinds would be the annual

increments which we have talked about. And also, as you rightly

mentioned, we'll continue our focus on the build, acquire and partner

framework and investments around that would be part of it.

While some of those we would want to mitigate with better operational

rigor, with the help of the usual levers which we have called out and also

look at optimization on some of the non-employee expenses. As you

rightly called out, the rupee depreciation does help, not guaranteed

always. Overall, we'd want to balance it and keep margins within a tighter

reach. We'd like to move towards 26%, but on a longer-term basis.

Nitin Padmanabhan:

Perfect. That's helpful. Just one last from my end. Overall, coming

out of last year and getting into the next, do you believe that all known

client-specific headwinds are behind, and we should see better revenue

accretion from deal wins and from a deal win momentum perspective as

well? But do you think that is on an accelerating trajectory.

Page 25 of 34

K Krithivasan:

By and large, most of the headwinds we know probably are behind us,

excepting few that may come up or that we have already accounted for.

But at this time, we are not expecting. Of course, nobody can predict what

will happen down the line, but I think most of the issues are behind us.

Nitin Padmanabhan:

That's helpful. Thank you so much and all the best.

Moderator:

We'll take our next question from the line of Vibhor Singhal from Nuvama

Equities. Please go ahead.

Vibhor Singhal:

Hi, thanks for taking my question. Just two questions from my side. One

is, Krithi, we mentioned our AI revenue to be around $2.3 billion

annualized, that's basically almost 6.5% to 7% of our total revenue.

Wanted to basically understand, if I were to draw a parallel to the last

digital cycle, there also, I think after a certain stage, we had started

quantifying our digital revenue.

The way we saw that cycle play out is that initially there was

cannibalization of revenue. And at the same time, we had growth from the

digital revenues. And gradually the growth from the digital revenue was

able to more than compensate the cannibalization of revenue.

Are we seeing a similar trend this time? Do we expect a similar cycle to

follow this time also, that there are productivity gains that we are passing

on to the clients because of which we are losing out revenue? On the

other hand, your $2.3 billion is going to grow much strongly.

And at some point, of time in the coming quarters, we'll probably reach an

inflection point. Is that a good way to look at the GenAI cycle? How similar

or different would it be from the last cycle? That would be really helpful.

K Krithivasan:

Structurally what you are saying is correct, however, I don't know whether

it will be the same time period in which the whole thing will change. You

would expect the AI revenues to increase going forward, along with some

Page 26 of 34

of the traditional revenues to slowly taper down and AI revenue to

overcompensate for the reduction in the revenue in other parts of the

service line.

But the timelines probably can vary. I'm not able to predict the timelines

on how all these different cycles will move. Aarthi, you want to add?

Aarthi Subramanian:

Vibhor, if I may just add to that, if you have to compare to the

digital transformation that you alluded to, where is the transformation

budget, right, largely bucketed as AI going?

There are three buckets, one is, Enterprise transformation. There is still a

lot to be done on digital, which is still to be done in companies, whether

it's cloud adoption, migrating to cloud, data modernization, cyber

security, enterprise systems upgrade, whether it's S/4HANA, Salesforce,

so all those are ongoing, So that's a transformation bucket.

The second one, which is very purely AI-led, is the modernization

opportunities that we see. Tech debt reduction was always a priority, but

that was always postponed by enterprises because it would take long, it

would cost a lot, but I think AI is playing in there and helping customers

clear tech debt better, faster. So that's begun. Long way to go, but that's

the second vector of opportunity.

The third is the pure play AI transformation, what Krithi earlier alluded to

as industry value chain transformation, where you're really doing AI

engagements that create direct business impact.

Vibhor Singhal:

That was really helpful, Aarthi. Krithi, one more question from my side and

it's probably more at a strategy level, maybe you and basically the team

can answer on that. If you look at FY26, we ended the year at -2.4% CC

YoY decline. If I compare our revenue growth this year with our closest

Page 27 of 34

competitor, the difference would be almost 5 to 6 percentage points.

That's probably the widest that the gap has ever been.

But on the other side, our margins are very, very strong, probably one of

the highest margins that we have. We, of course, remain at the highest

margin level in the industry, and we are very strong in margins while the

entire industry is facing a lot of margin pressure.

What is the company level strategy at this point of time, like, we want to

continue to focus on the profitable growth part. Have we ever discussed

that? Should we be ready to compromise a bit of margins to maybe boost

growth? What is the direction in which the board and management is

thinking in terms of balance between a better growth and profitability?

K Krithivasan:

Vibhor, I get the question. Fundamentally, we believe our focus on margin

is not affecting our revenue growth. Of course, at the same time, in fact,

we believe the good margins we have, gives us greater flexibility to

approach new deals and be more competitive in gaining market share.

And we have been able to prove that time and again. We don't lose deals

on pricing. We work with our customers, we ensure that we give the best

solution, and we've been able to win deals.

This is our overall thesis. We believe margin and growth are not conflicting

with one another. We should be able to do well on both. And we continue

to stay close to our customers. We continue to invest, the margin we have

helps us to invest, like what you saw in the last two acquisitions and

investment on HyperVault. They are all possible because we are able to

generate margin and it gives us the ability to invest for growth. We don't

believe these are at loggerheads with one another.

Vibhor Singhal:

Okay. Thank you so much for answering my question and all the best.

Page 28 of 34

Moderator:

Thank you. Our next question is from the line of Ashwin Mehta from Ambit

Capital. Please go ahead.

Ashwin Mehta:

Hi, thanks for the opportunity. One question Samir, what is the impact of

wage hikes that we see in terms of our margins next quarter? And

secondly, any color in terms of this deal flow that we've announced,

which is pretty strong? What is the renewal share in terms of that, given

that there are quite a few deals in the press release where we have

extended our relationship with these clients?

Samir Seksaria:

On the wage increments, you should expect a similar impact on what we

have seen in the past annual increment cycle, which had been in the

range of 150 to 200 basis points.

K Krithivasan:

In terms of colour or the characteristics of the deals of TCV, I would say

about mostly a 50-50 or 45-55 in terms of between renewals and new

programs. I think this quarter maybe about 50% to 55% could be on

renewals, around 40% to 45% would be on new programs. And this varies

typically in a smaller band, between 40% to 60% band, it varies one way

or another.

Ashwin Mehta:

Thanks, Krithi. And just one follow-up, in terms of deals, are you seeing

early renewals wherein vendors like yourself as well are going in for early

renewals or the deals are largely getting renewed on time?

K Krithivasan:

By and large on time, but when we also see an opportunity to go back to a

customer and ensure that there is really a renewal can be done with

greater AI infusion, greater productivity delivered, and at the same time,

with expansion in scope. We do go to the customers, and we offer to

renew early whenever they see value and whenever it's mutually

beneficial as well.

Ashwin Mehta:

Thanks, Krithi. Thanks, Samir. And all the best.

Page 29 of 34

Moderator:

Thank you. Our next question is from the line of Rishi Jhunjhunwala from

IIFL. Please go ahead.

Rishi Jhunjhunwala:

Yes, thanks for the opportunity. I think my questions have been

answered, but maybe just a quick clarification. Just if we think about your

thought process around wage hikes, right? So, we've deferred it twice in

the last five, six years since COVID. This time, we have reinstated it after

when we announced it in September, back to the April cycle.

Just wanted to understand what's the thought process behind that, given

that the overall demand environment, the supply side environment, and

the macro uncertainties largely remain there and haven't seemed to be

changing materially over the past six to nine months.

K Krithivasan:

Rishi, it's a reflection as a first is we want to ensure that we properly

reward all the associates who have been working tirelessly for us. And as

you know, that while in September, we were able to give increments to

80% of associates, for the senior executive associates we were unable to

give increments at that time.

We wanted to ensure that when we restart our increment cycle, we reset it

and start for everyone. But it's also a reflection of the fact that we believe

that we have enough deal momentum and demand on our side, so that

we'll be able to handle the increased wage cost, wage bill, because of

increments.

Rishi Jhunjhunwala:

While you've started giving annualized AI revenues, would it be

possible to throw some color on AI deals as well, just to get some sense

of how those are progressing?

Aarthi Subramanian:

Rishi, if you look at it, AI deals are -- I would say of two kinds, one is

many of the mega deals that Krithi spoke about today, they have a

Page 30 of 34

significant amount of AI embedded into them, in terms of how we deliver

the service, also in terms of how we transform clients' business.

But apart from this, when we are saying AI revenue, we are only calling out

the specific AI for business transformation revenue, which we said has

exceeded $2.3 billion on an annualized basis and when you look at the

nature of programs, it's across industries, across markets.

And we see that a lot of these programs are rapid build, 12-to-16-week

delivery type of solutions. These are high impact problems that the

customers are choosing, that we can deliver in faster cycles with forward

deployment engineers. So that is included. Some of the AI modernization

I talked about, which is starting to gain momentum is all included as part

of that.

Rishi Jhunjhunwala:

Understood. Thank you.

Aarthi Subramanian:

And one last thing is agentic BPS, which I missed talking about. I

think that's something which is gaining traction. Agentic AI in business

process services and we see that earlier in FY25, the time taken to

implement AI in business process versus this year, we are seeing faster

adoption cycles from customers, because customers are more confident

of now putting AI into production. But obviously, with all the guardrails,

focus on security, governance and all of that.

Moderator:

Thank you. Our next question is from the line of Gaurav Rateria from

Morgan Stanley. Please go ahead.

Gaurav Rateria:

Hi, thank you for taking my questions. I have two questions for Krithi and

one for Samir. My first question for Krithi is your comment that you made

on the growth in the client's band of revenue bands in mid and large size

and you talked about stability returning.

Page 31 of 34

Is this due to a lower leakage compared to the past or is it more led by

better macro, which is improving the spend in these accounts? The

second question is on AI. If you keep the macro aside for the moment,

would you expect the new AI services to be accretive to revenue growth in

fiscal '27, net of all the deflation that you see in your renewals existing

business or is it too early to confirm any such trend?

And the last question for Samir is that AI for business, when you look at

the revenue productivity and the margins in that portion of the business,

how does it compare to company average? Is it better? Is it in line? Is it

lower? Thank you.

K Krithivasan:

So, Gaurav, first on the client metric improvement. See it's a combination

of all the factors, because you will not be able to grow if there's no

stability or there's no revenue coming in and essentially, it's a reflection of

the fact, overall at a high level, the clients are more comfortable in getting

into larger transformation programs or some amount of discretionary

spend improving.

And, of course, it's also possible there are some cases of vendor

consolidation happening where you gain market share, but definitely, it

indicates that the stability and the increased confidence from the clients

as well. For your question about AI, again, our expectation is AI will be net

accretive, like to see the initial year, our attempt would be to ensure that

we arrest the degrowth while the AI revenue increase.

But, of course, over a period of time, AI revenue or AI related revenue,

because it will become very difficult to classify after some time on what is

AI, what is AI adjacent revenue, but ensure that they all grow, we will

expect them to grow much faster. At that time, the deflation in the other

part may not matter materially like same cycle with whatever happened

during the digital transformation cycle that trend will resume.

Page 32 of 34

Samir Seksaria:

Gaurav, on the AI and data part, the revenue productivity is definitely

much better than the TCS average or the traditional business, both at

onsite and offshore. Margins, I will not call out because there would be

investments which would be temporary or in the initial phase, so it

wouldn’t be like to like for comparison.

Gaurav Rateria:

Thank you very much and all the very best.

K Krithivasan:

Thank you, Gaurav.

Moderator:

Thank you. Ladies and gentlemen, that was the last question for today. I

now hand the conference over to management for closing comments.

Over to you.

K Krithivasan:

Thank you, operator.

• We are very pleased with the continuous revenue growth momentum

we have seen in the last 3 quarters. In Q4, our Revenue grew by 1.2%

QoQ in constant currency, with an operating margin of 25.3% and a

net margin of 19.4%.

• We had a very strong TCV of $12 billion in Q4, with 3 mega deals.

• Annualized AI services revenue crossed US $2.3 billion.

We remain dedicated to our goal of establishing ourselves as the world’s

premier AI-driven technology services provider. Our robust five-pillar

strategy, combined with sustained investments across Infrastructure to

Intelligence, continues to advance this objective.

I extend my appreciation to all TCS employees for their unwavering

commitment and professionalism, which have been instrumental to the

company’s continued success.

This concludes our call today.

Page 33 of 34

Thank you for your participation.

Moderator:

Thank you, members of the management. On behalf of TCS, that

concludes this conference call. Thank you for joining us and you may now

disconnect your lines.

Note: This transcript has been edited for readability and does not purport to be a verbatim

record of the proceedings.

Page 34 of 34