BENGALURU: TCS CEO K Krithivasan indicated caution mixed with optimism regarding the current demand environment even as the IT major crossed the $30-billion revenue milestone in FY25. For FY25, TCS’s revenue grew by 4.2% in constant currency compared to 3.4% in the previous year.
However, for the March quarter, growth significantly slowed to 2.5% from 3.6% and 5.5% respectively in the preceding two quarters, impacted by curtailed discretionary spending and deferred decision-making.
“Overall, while we had a de-growth of 0.8% on a sequential basis, all the major markets and most industry verticals grew. Based on the order book we’ve announced and the deals we’ve signed, while there could be some short-term uncertainty, FY26 will be a better year than FY25. Until Feb, we were quite positive and very optimistic about the quarter. However, in March, we started seeing some uncertainty creeping in, resulting in some project and decision-making delays. We have not seen any major project cancellations. There are some ramp-downs, but there are delays in decision-making. We believe in the next few months, this uncertainty should settle, and we should be back in business,” Krithivasan said in an earnings conference on Thursday.
Growth in the mainstay North America market, which accounts for 50% of the overall business, dropped 1.9% in the March quarter and 1.8% for the 2024-25 financial year. TCS’s operating margins declined to 24.2% in the March quarter compared to 24.5% in the Dec quarter. CFO Samir Seksaria said the guiding margin beacon remains at 26-28%.