On an analyst call after the earnings announcement, CEO K Kritivasan cited “some signs of improvement, particularly in financial services in North America”, acknowledging that “the demand outlook continues to remain cautious”. Due to the death of Ratan Tata, the planned press conference was cancelled.
“Stability in the macro brings initial signs of confidence with easing interest rates… consumer confidence and industry confidence will improve. This is likely to improve investment,” Krithivasan said, adding that the second half of FY25 could be better and the industry, which has been grappling with an unprecedented slowdown in demand, could emerge from the shadow of macroeconomic uncertainty.

On a sequential basis, net profit fell 1%, mostly due to margin-depressing work outside the Americas. On the revenue front, TCS beat ET estimates at Rs. 64,259 crore posted consolidated revenue, up 7.6% over a year ago and 2.6% respectively. The BSNL deal boosted India sales by 95% from a year earlier as its biggest market of North America fell by 2.1% and the UK grew by 4.6%.
The company will pay on November 5 per equity share Rs. 10 announced a second interim dividend. TCS shares were marginally lower (0.6%) on BSE at Rs. 4,228.40, while the Sensex ended up 0.2%. TCS shares have gained 8% in the last three months.
The company said it now has more than 600 AI and GenAI connections successfully deployed in production or in various stages of development. TCS said its AI and GenAI pipeline grew from $900 million in the March quarter to $1.5 billion in the April-June period. Without specifying numbers, Kritivasan said the AI and GenAI pipeline is doubling every quarter.
TCS said it added three large customers in the quarter. The number of customers contributing more than $100 million in revenue increased to 66 from 63 in Q1 of this fiscal year. Its order book was marginally higher at $8.6 billion in total contract value (TCV) compared to $8.3 billion in the June quarter.
Margins fell to 24.1% from 24.7% for the second quarter in a row. Analysts had expected TCS to get higher revenue contribution from BSNL, which has a pass-through component, limiting the firm’s margin expansion.
“The key business themes observed across industries were cost optimization, vendor consolidation, customer experience transformation, supply chain modernization, risk and resilience,” Kritivasan said. “Globally, clients continue to prioritize efficiency through cost transformation programs… Financial institutions in the US are looking to sustain growth momentum with the Fed’s first rate cut in four years.”
TCS said growth was led by energy, resources and utilities (7.0%) as well as manufacturing (5.3%). Markets like India, Middle East and Africa (+7.9%), Asia Pacific (+7.5%), Latin America (+6.8%) were above the company average.
Accenture raised its FY25 guidance following the US Federal Reserve’s interest rate cut last month and the stock market is buoyant about IT after sentiment improved. ET is reporting on improved industry expectations for the second half as hiring and demand show signs of pick-up after a deep sluggishness. HCLTech will report earnings on October 14 and Infosys and Wipro on October 17.
HEADCOUNT increases
The IT giant added 5,726 employees in the second quarter, continuing the net headcount addition from the previous quarter. The total number of employees at the end of September was 612,724, up from 606,998 in the June quarter. Attrition rose 20 basis points sequentially to 12.3% in the September quarter. A basis point is 0.01 percentage point.
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