TCSBSEFull Year FY 2026April 14, 2026

TATA CONSULTANCY SERVICES LTD.

8,721words

76turns

9analyst exchanges

0executives

Key numbers — 40 extracted

1.2%

re 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 co

1.4%

mic 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 gr

2.4%

is 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

1.0%

ross 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 stro

12 billion

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 U

rs,

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 accou

100 million

eturning 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 milli

50 million

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

1 million

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

2.3 billion

he 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

1 GW

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 partnerin

25%

cluding 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 inc

Guidance — 20 items

Nehal Shah

opening

“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.”

K Krithivasan

opening

“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.”

K Krithivasan

opening

“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.”

Samir Seksaria

opening

“Coming to the full year FY26, our revenue was ₹267,021 crore, which is a growth of 4.6% on a YoY basis.”

Samir Seksaria

opening

“For FY26, our operating margin was 25%, an expansion of 70 basis points over the prior year, and at a 4-year high.”

Samir Seksaria

opening

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

Samir Seksaria

opening

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

Aarthi Subramanian

opening

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

Let me share a few examples

opening

“In FY26, all next-gen services delivered strong growth across industries and markets, backed by our continued investments in AI, talent, and innovative solutions.”

Let me share a few examples

opening

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

Risks & concerns — 14 flagged

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.

— Nehal Shah

Also, the ingoing impact of the India wage code is included.

— Samir Seksaria

Together these two accounted for an impact of 40 basis points.

— Samir Seksaria

Together, these two accounted for a margin impact of 50 basis points.

— Samir Seksaria

In dollar terms, the reported revenue was $30.017 billion, a decline of 0.5%.

— Samir Seksaria

These exceptional items relate to severance-related expenses, legal provisions, and the impact of changes in India wage code.

— Samir Seksaria

Increased uncertainty around interest rates, inﬂation, and central bank actions inﬂuenced client sentiment, resulting in cautious investment decision-making.

— K Krithivasan

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.

— K Krithivasan

• CMI saw a modest decline this quarter, but we are witnessing promising signs of a rebound in IT spending in CMI.

— K Krithivasan

However, the Utilities segment is experiencing stress, and signiﬁcant cost optimization opportunities are opening up.

— K Krithivasan

If you look at FY26, we ended the year at -2.4% CC YoY decline.

— Vibhor Singhal

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.

— Vibhor Singhal

One question Samir, what is the impact of wage hikes that we see in terms of our margins next quarter?

— Ashwin Mehta

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.

— K Krithivasan

Q&A — 9 exchanges

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

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. 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? 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 t

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. 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

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 c

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 t

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

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

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

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, bec

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. 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 yo

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 a

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, con

Management

Speaking time

K Krithivasan

Moderator

Samir Seksaria

Aarthi Subramanian

Nehal Shah

Kumar Rakesh

Nitin Padmanabhan

Sudheer Guntupalli

Vibhor Singhal

Ashwin Mehta

Opening remarks

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.

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 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

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. 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

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. 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 Whi

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 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 p

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