TCS reports strong Q1, ends office tracking for WFH employees
MUMBAI, INDIA — Information technology services and consulting firm Tata Consultancy Services (TCS) recently reported a strong financial performance for the first quarter of the fiscal year 2025.
According to the firm, its net income increased by 9% to ₹120.4 billion (US$1.44 billion), aligning with analysts’ expectations of ₹119.59 billion (US$1.43 billion). Sales also saw a 5.4% rise, reaching ₹626.1 billion (US$7.2 billion).
TCS is leveraging technologies such as artificial intelligence (AI) and machine learning (ML) to drive corporate investment in IT projects. Despite global economic uncertainties and geopolitical conflicts, including the ongoing war in Ukraine, the company remains optimistic about future growth.
“We still believe it’s too early to call whether the growth momentum is sustainable because the market conditions continue to remain the same as they were last quarter,” said TCS CEO K. Krithivasan during a news conference in Mumbai.
The company anticipates a better financial year through March 2025 compared to the previous year. TCS shares closed up 0.4% in Mumbai before the earnings announcement and have gained 3.4% this year, driven by expectations of increased IT spending.
Anurag Rana & Andrew Girard, analysts from Bloomberg Intelligence, noted that TCS’s Q1 results indicate pressure on discretionary IT spending, particularly among North American clients.
However, they acknowledged an improvement in sales declines within the banking and technology sectors compared to the previous quarter.
AI and technological advancements
TCS is betting on its partnership with OpenAI-backer Microsoft Corp. to develop AI-based software services for clients.
Krithivasan expressed confidence in AI’s potential to generate “significant revenue” within a few quarters.
“My view is the interest will keep increasing, we will identify newer use cases, we will understand how this technology has to be deployed over a period of time and then you will start seeing it become mainstream,” he added.
End to office tracking
In a significant policy shift, TCS also announced that it would stop tracking the number of employees working from the office now that the company has reached pre-pandemic levels of in-office work.
“We actually have come to the point where we believe we are coming back to almost the same levels as we were pre-pandemic times,” said TCS Chief of Human Resources Milind Lakkad in an interview with the Press Trust of India (PTI).
Lakkad noted that the percentage of employees working from the office five days a week now exceeds the previously announced 70%, although he did not provide specific figures.
This change comes as the IT industry grapples with the balance between remote work and the benefits of in-office collaboration.
