Aspirational margin band of 26%-28%
Management reiterated the long-term margin aspiration but declined to provide a timeline for achievement, citing macro uncertainty.
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margins
Fresher hiring target of 40,000 for FY24
The company plans to hire 40,000 freshers in FY24, though the quarterly spread remains uncertain due to demand softness.
GenAI revenue materialization in 2-3 quarters
Management expects GenAI engagements to start contributing meaningfully to revenue in a couple of quarters.
FY25 better than FY24
Management reiterated that FY25 will be better than FY24 in terms of revenue growth, but declined to provide specific numbers.
Operating margin aspirational band of 26-28%
CFO Samir Seksaria reaffirmed commitment to the 26-28% operating margin band, with levers including productivity, utilization, and pricing.
Campus hiring target of ~40,000 trainees
CHRO Milind Lakkad indicated that the company aims to hire close to 40,000 trainees in FY25, consistent with historical practice.
International revenue to improve in FY26 vs FY25
Management expects constant currency international revenue to be better in FY26 than FY25, though overall growth aspiration remains high.
Q2 revenue likely better than Q1 if no further delays
CEO stated Q2 should be at least better than Q1 if no additional project delays occur.
Margin improvement levers: utilization, productivity, pyramid
CFO cited improving utilization, productivity, and pyramid as key levers to improve margins from current levels.
Margin guidance maintained at 26%-28%
Management reiterated the long-term operating margin range of 26%-28%, with no specific timeline for achievement.
Deal win run-rate raised to $9-10B per quarter
COO NGS indicated the new normal for quarterly deal wins is around $9-10 billion, up from the earlier $7-9 billion range.
BSNL 4G/5G rollout target in 12-18 months
Management expects to complete the BSNL network rollout within 12 to 18 months from Q2 FY24.
Fresher hiring to continue; all offers honored
TCS will continue campus hiring and honor all offers, though onboarding may be delayed by a quarter.
Life sciences headwinds to stabilize in Q3, return to growth in Q4
Client-specific headwinds in life sciences and healthcare are expected to stabilize in Q3 and return to growth in Q4.
BSNL deal peak revenue to continue for one more quarter, then taper
The BSNL transformational program is at peak revenue; expected to remain at similar levels for one more quarter before tapering.
Margin aspiration to exit Q4 at 26%
Management aspires to exit Q4 FY25 at 26% operating margin, similar to Q4 FY24 exit.
Growth markets as long-term growth driver
TCS is investing significantly in India, APAC, Latin America, and Middle East & Africa as sustainable long-term growth drivers.
FY26 international revenue growth better than FY25
Management expects constant currency international revenue growth for FY26 to exceed the ~70bps achieved in FY25.
Operating margin aspirational band of 26%-28%
CFO reiterated the goal to return to the aspirational margin band of 26%-28%, with continued improvement expected.
AI data center subsidiary with 1 GW capacity over 5-7 years
Board approved creation of a subsidiary to build a sovereign AI data center in India, with capacity up to 1 GW, phased over 5-7 years at ~$1B per 150 MW.
Continued workforce release of ~2% mid-senior level
CHRO indicated that the planned release of ~2% of mid-to-senior workforce with skill mismatch is halfway done; further releases may continue.
BFSI growth expected from Q4
Management expects BFSI to bottom out and grow from the coming quarter, driven by deal wins and seasonal bounce-back.
India growth momentum to continue over 4-6 quarters
BSNL deal will contribute over the next 4-6 quarters, with momentum picking up quarter on quarter.
Margin improvement momentum to continue
CFO stated that levers like productivity, utilization, and subcontractor costs offer further scope for improvement, though no specific target given.
Fresher hiring of 40,000 for FY24 still on track
CHRO reaffirmed the plan to onboard 40,000 freshers in FY24, with hiring progressing as per schedule.
Margin aspiration of 26% by Q4 FY25
Management aims to exit Q4 at 26% operating margin, within the 26%-28% aspirational band, driven by operating efficiencies and BSNL tapering.
BSNL revenue to taper from Q4 FY25 through Q2 FY26
The BSNL contract is 70% complete; revenue will start tapering in Q4 and may extend to Q2 FY26. Management expects to replace most of it via other opportunities.
CY25 to be better than CY24 for international business
Management expects stronger growth in CY25 vs CY24, driven by early discretionary recovery and strong deal pipeline, despite BSNL headwinds.
Increased campus hiring next year
Preparations underway to onboard a higher number of campus hires next fiscal year, signaling confidence in future demand.
International revenue growth aspiration for FY26
Management aims to deliver higher international revenue growth in FY26 compared to FY25, with optimism for Q4.
Operating margin target of 26%-28% band
CFO stated efforts to inch closer to the traditional 26%-28% margin band, with 26% as near-term goal.
AI services revenue growth trajectory
AI services revenue expected to continue growing at a strong rate, with $1.8B annualized in Q3.
Data center revenue timeline
Revenue from AI data center build-out expected to start ~18 months after anchor customer announcement.
FY25 growth expected to be better than FY24
Management stated that based on strong TCV, FY25 should be better than FY24, but did not provide specific numbers.
Operating margin trajectory similar to FY24
CFO indicated Q1 will see headwinds from wage hikes, with margins clawing back through the year, similar to FY24 pattern.
Pricing improvements to drive incremental margins
CFO noted that incremental margins will need to come from pricing improvements, including renewals and new deals at higher prices.
FY26 revenue growth expected to be better than FY25
Management believes FY26 will be better than FY25 based on order book and customer discussions, assuming short-lived uncertainty.
Operating margin target range of 26%-28% remains
CFO reiterated the 26%-28% margin beacon, with levers like pyramid, utilization, and productivity expected to help achieve it, though timeline uncertain.
Campus hiring of 40,000+ trainees in FY26
CHRO confirmed campus hiring will be similar or slightly higher than FY25's 42,000, with wage hike timing dependent on clarity.
CapEx to remain elevated at ~₹5,000 crore
CFO stated no plans to scale down investments in talent, innovation, infrastructure, or partnerships despite uncertainty.
FY27 growth: normal first-half seasonality, no quantified target
Management expects FY27 to start with a normal Q1/Q2 seasonal pattern and is positive on international growth, but refused to quantify growth.
AI revenue expected to outrun traditional-services taper
AI revenue is expected to grow faster and eventually overcompensate for tapering traditional services revenue, but management could not predict the timing.
Wage hikes: 150-200 bps margin headwind expected
Wage hikes are expected to create a 150-200 bps margin headwind in the next quarter.
Medium-term margin aspiration: 26-28%
Longer term, management wants margins to move toward 26-28%, while continuing investment in build, partner, and acquire initiatives.