Written by India’s top IT companies TCS, Infosys and HCLTech reported better-than-expected revenue growth, reflecting steady demand in key international markets. However, profitability remained under pressure due to higher statutory payouts following the implementation of the New Labour Code, which increased employee-related costs.
Tata Consultancy Services (TCS) announced that its shares have turned ex-date for a special dividend of ₹46 per share and an interim dividend of ₹11 per share, offering continued returns to shareholders.
Despite healthy growth in Artificial Intelligence (AI) and digital services, TCS reported a 14% year-on-year decline in net income, missing analysts’ estimates. The decline was attributed to elevated costs and margin pressures, even as AI-led deal traction remained strong.
The company also reported a notable reduction in headcount, raising concerns about job stability in the IT sector, especially amid cautious hiring and productivity-led workforce optimization.
On the positive side, TCS secured a $1.83 billion contract from Bharat Sanchar Nigam Ltd (BSNL) for the deployment of a nationwide 4G network, strengthening its position in large domestic infrastructure projects.
Brokerage firm LKP Research maintained a ‘BUY’ rating on TCS with a target price of ₹3,880, citing stable global demand trends, strong order book visibility and resilience in international operations.
Overall, while revenue momentum and large deal wins remain encouraging, near-term margin pressures and workforce concerns continue to weigh on the sector outlook.