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TCS Earnings Reveal Margin Challenges Amid Wage Hikes and Project Ramp-downs
8 Oct
Summary
- 1-3% sequential revenue rise expected in Q2
- Wage hikes likely to impact margin expansion
- Deal wins forecast between $7-$9 billion
As India's largest IT services company, Tata Consultancy Services (TCS) is set to kick off the second quarter earnings season on October 8th, 2025. According to multiple reports, TCS is likely to post a 1-3% sequential rise in revenue, with projections ranging between ₹65,140 crore and ₹65,220 crore, compared to ₹63,437 crore in the previous quarter.
The growth is expected to remain modest due to the ramp-down of the BSNL project, although foreign exchange gains may provide some cushion. However, the impact of recent wage hikes could weigh on the company's margins. TCS's net profit is projected to rise 1-2% sequentially to around ₹12,550-₹12,700 crore, with EBIT margins expected to remain flat at 24.3-24.5%.
Despite the macro uncertainties, TCS is forecast to secure $7 billion to $9 billion in new deals, highlighting steady client demand. Investors will also be closely watching the management's commentary on the recent H-1B visa fee hike and its potential impact on the company's cost structure and delivery models.
