Saturday, February 15, 2025

TCS CEO Balances Confidence & Caution in FY25 Growth

Tata Consultancy Services (TCS), India’s largest IT services firm, is treading cautiously in the face of economic uncertainty. While expressing confidence in future growth, TCS CEO K Krithivasan acknowledges that challenges persist.

In a recent interview, Krithivasan highlighted “It would not be appropriate to say that the worst is behind us,” Krithivasan remarked.” We do not have the comfort or confidence to make such a statement at this time.”

Background

The global economy remains unpredictable due to ongoing uncertainties in key markets such as the US, Western Europe, and the UK. Clients are re-evaluating spending, leading to quick adjustments.

Despite the caution, TCS boasts a robust order book of $42.7 billion. The company aims to outperform its FY24 performance in the current fiscal year (FY25).

Q1 FY25 Results

TCS reported a 1.93% sequential dollar revenue growth in Q1 FY25, surpassing analysts’ expectations. Net profit rose by 8.72% YoY to Rs 12,040 crore for the June quarter.

The company’s operating margin expanded by 1.5% YoY. TCS reversed a year-long trend of workforce reductions, adding 5,452 employees in the quarter.

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Analyst Keith Bachman from BMO Capital Markets suggests that while the IT services sector estimates stabilize, there’s still not enough conviction to predict significant improvement in FY25 growth.

Recent Updates from TCS

IT giant said that nearly 70% of its employees have returned to the office following the introduction of a new policy linking variable pay to office attendance.

TCS continues to expand client relationships, invest in innovation (including AI-focused initiatives), and create new capabilities in emerging technologies.


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Sahiba Sharma
Sahiba Sharmahttps://sightsinplus.com/
Sahiba Sharma, Senior Editor - Content at SightsIn Plus