📈 TCS FY25 Results: Muted CC Growth, Hence Low Sales & Profit Growth in Headwind Environment, but valuations near to favourable. – A Deep Dive for Investors
Tata Consultancy Services (TCS) has wrapped up FY25 with a steady performance (CC Growth was slightly lower then estimated), showcasing resilience, margin stability, and strong cash flow in a globally challenging environment.
💼 Revenue Growth: Steady Climb Despite Global Headwinds
TCS clocked ₹2,55,324 crore in revenue for FY25, marking a 6.0% YoY growth (4.2% in constant currency). Growth was slightly lower from our estimate of 7% and CC Growth was slower to 4.2% v/s 4.5% in the previous quarter. The growth was especially driven by:
Regional Markets: 🚀 +37.2% YoY
India: 🔥 +62.6% YoY
Energy & Utilities: ⚡ +5.1%
Manufacturing: 🏭 +2.9%
📍 Quarterly Revenue (Q4 FY25) stood at ₹64,479 crore, up 5.3% YoY.
💰 Profitability: Margins Remain Strong
Even as demand softened in key verticals like BFSI and Communications, TCS maintained strong margins however our estimates were 19.4% for this year:
This speaks to TCS’s disciplined cost structure and execution excellence.
📈 Net Profit: Modest But Solid
FY25 Net Profit: ₹48,797 crore (+5.9% YoY, our estimates were 8%)
Q4 Net Profit: ₹12,293 crore (-1.7% YoY, due to high base and normalization)
Earnings per share (EPS) for FY25 came in at ₹134.19 v.s our estimate of 136. Slightly lower.
🌐 Segment & Geographic Performance
📊 Segment-Wise CC Growth (FY25):
Energy & Utilities: +5.1%
Manufacturing: +2.9%
BFSI: +0.7%
Consumer Business: +0.3%
🚨 Life Sciences & Healthcare: -1.6%
🚨 Communication & Media: -9.5%
🌍 Region-Wise CC Growth (FY25):
🇮🇳 India: +62.6%
🌎 MEA: +11.2%
🌏 Asia Pacific: +6.8%
🇬🇧 UK: +4.0%
🇺🇸 North America: -1.8% (main drag)
India and regional markets are now key growth engines for TCS.
👩💻 Workforce Metrics
Total Employees: 6,07,979
Attrition: 13.3% (among the best in industry)
Trainee Onboarding: 42,000
Women in Workforce: 35.2%
Total Learning Hours: 56 million
TCS remains a top employer globally and continues to invest in talent upskilling and retention.
💵 Solvency, Liquidity & Profitability Ratios
Free Cash Flow: ₹46,449 crore
Cash Flow Conversion: 125% of net income
Debt Position: Minimal
Return on Equity (RoE): ~51.3%
Shareholder Payout (Dividends): ₹44,962 crore
With a fortress balance sheet and consistent RoE, TCS shines on the fundamentals.
💹 Valuation at CMP ₹3,246
FY25 EPS: ₹134.19
P/E Ratio: ~24.2x
As this year we saw the fall valuations are not so high even at low growth scenario. The valuation reflects TCS’s premium quality, global scale, and earnings stability.
🇺🇸 Impact of Recent US Tariffs
No direct commentary yet, but:
North American weakness (-1.8%) could reflect early caution.
TCS’s diversified portfolio and rising India/EMEA revenues act as natural hedges.
🔮 Outlook: What Lies Ahead
🔸 Near-Term:
Slower momentum in BFSI and tech.
Strong deal pipeline: Q4 TCV at $12.2 billion with a book-to-bill ratio of 1.6.
We may see muted 4-6% Sales Growth even in the Near term.
🔹 Long-Term:
Heavy investments in:
AI/GenAI: 1/3rd of client projects already AI-enabled
Cloud, Cybersecurity, and Autonomous Ops
Platforms like ignio™, Mastercraft™, WisdomNext™
TCS is betting big on AI-powered transformation.
✨ Bottom Line
TCS continues to deliver consistent, margin-accretive, and tech-forward growth. If you’re looking at long-term compounders in Indian equities, TCS is still a top-tier choice with challenges in the near term.
🧠 AI. Cloud. Talent. Stability. That’s TCS 2.0.
