BENGALURU: IT major TCS‘s revenue grew 5.5% year-on-year in constant currency in the Sept quarter. The company’s mainstay banking and financial services sector showed signs of recovery even as clients continued keep IT costs down. However, its outlook on demand remains guarded as the global picture continues to show uncertainty.
“Amidst an uncertain geopolitical situation, our biggest vertical, BFSI, showed signs of recovery…Financial institutions in the US are looking at sustaining the growth momentum. Stability in the macro brings initial signs of confidence,” TCS CEO K Krithivasan said in an investor call on Thursday.
He added that with the easing of interest rates, consumer confidence and industry confidence will improve. “This can potentially lead to improved investments. Customers are focused on operational efficiency and upgrades for the future with an eye on efficiency and automation,” he said.
Growth was led by energy, resources & utilities, and manufacturing, which grew 7% and 5.3%, respectively. “We are seeing some pressure in many accounts. Labour and supply chain constraints are impacting the industry. However, in these areas of concern, manufacturing continues to see a strong demand environment and deal pipeline,” Krithivasan said.
The banking and financial services vertical grew 0.1% in the Sept quarter compared to the year-ago period, while technology and communications saw a decline. However, its mainstay business market North America saw a 2.1% decline during the Sept quarter.
TCS’s operating margin witnessed a quarter-on-quarter decline of 60 basis points to 24.1% in the Sept quarter from 24.7% earlier. The total order book for the period stood at $8.6 billion – a decline of over 3.5% sequentially.
TCS added 5,726 employees over the last quarter, bringing the total number of employees to 612,724 in the Sept quarter. The company stated that it is on track to hire freshers. Company CHRO Milind Lakkad said TCS is considering differential compensation for each segment of hiring. “We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for FY26,” Lakkad added. He said that the company was planning to hire around 40,000 freshers in the current fiscal, like what the company did previously. TCS’s attrition rate in the Sept quarter stood at 12.3% like in the June quarter.
