TCS Management Guidance Tracker

Management reiterated the long-term margin aspiration but declined to provide a timeline for achievement, citing macro uncertainty.

Management reiterated the long-term operating margin range of 26%-28%, with no specific timeline for achievement.

CFO stated that levers like productivity, utilization, and subcontractor costs offer further scope for improvement, though no specific target given.

CFO indicated Q1 will see headwinds from wage hikes, with margins clawing back through the year, similar to FY24 pattern.

CFO noted that incremental margins will need to come from pricing improvements, including renewals and new deals at higher prices.

CFO Samir Seksaria reaffirmed commitment to the 26-28% operating margin band, with levers including productivity, utilization, and pricing.

Management aspires to exit Q4 FY25 at 26% operating margin, similar to Q4 FY24 exit.

Management aims to exit Q4 at 26% operating margin, within the 26%-28% aspirational band, driven by operating efficiencies and BSNL tapering.

CFO reiterated the 26%-28% margin beacon, with levers like pyramid, utilization, and productivity expected to help achieve it, though timeline uncertain.

CFO cited improving utilization, productivity, and pyramid as key levers to improve margins from current levels.

CFO reiterated the goal to return to the aspirational margin band of 26%-28%, with continued improvement expected.

CFO stated efforts to inch closer to the traditional 26%-28% margin band, with 26% as near-term goal.

Wage hikes are expected to create a 150-200 bps margin headwind in the next quarter.

Longer term, management wants margins to move toward 26-28%, while continuing investment in build, partner, and acquire initiatives.

The company plans to hire 40,000 freshers in FY24, though the quarterly spread remains uncertain due to demand softness.

COO NGS indicated the new normal for quarterly deal wins is around $9-10 billion, up from the earlier $7-9 billion range.

Management expects BFSI to bottom out and grow from the coming quarter, driven by deal wins and seasonal bounce-back.

BSNL deal will contribute over the next 4-6 quarters, with momentum picking up quarter on quarter.

Management reiterated that FY25 will be better than FY24 in terms of revenue growth, but declined to provide specific numbers.

Client-specific headwinds in life sciences and healthcare are expected to stabilize in Q3 and return to growth in Q4.

Management expects stronger growth in CY25 vs CY24, driven by early discretionary recovery and strong deal pipeline, despite BSNL headwinds.

CHRO confirmed campus hiring will be similar or slightly higher than FY25's 42,000, with wage hike timing dependent on clarity.

AI services revenue expected to continue growing at a strong rate, with $1.8B annualized in Q3.

Management expects FY27 to start with a normal Q1/Q2 seasonal pattern and is positive on international growth, but refused to quantify growth.

Management expects GenAI engagements to start contributing meaningfully to revenue in a couple of quarters.

AI revenue is expected to grow faster and eventually overcompensate for tapering traditional services revenue, but management could not predict the timing.

Management expects to complete the BSNL network rollout within 12 to 18 months from Q2 FY24.

TCS is investing significantly in India, APAC, Latin America, and Middle East & Africa as sustainable long-term growth drivers.

TCS will continue campus hiring and honor all offers, though onboarding may be delayed by a quarter.

CHRO reaffirmed the plan to onboard 40,000 freshers in FY24, with hiring progressing as per schedule.

CHRO Milind Lakkad indicated that the company aims to hire close to 40,000 trainees in FY25, consistent with historical practice.

Preparations underway to onboard a higher number of campus hires next fiscal year, signaling confidence in future demand.

CHRO indicated that the planned release of ~2% of mid-to-senior workforce with skill mismatch is halfway done; further releases may continue.

Management stated that based on strong TCV, FY25 should be better than FY24, but did not provide specific numbers.

The BSNL transformational program is at peak revenue; expected to remain at similar levels for one more quarter before tapering.

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.

Management believes FY26 will be better than FY25 based on order book and customer discussions, assuming short-lived uncertainty.

Management expects constant currency international revenue to be better in FY26 than FY25, though overall growth aspiration remains high.

CEO stated Q2 should be at least better than Q1 if no additional project delays occur.

Management expects constant currency international revenue growth for FY26 to exceed the ~70bps achieved in FY25.

Management aims to deliver higher international revenue growth in FY26 compared to FY25, with optimism for Q4.

CFO stated no plans to scale down investments in talent, innovation, infrastructure, or partnerships despite uncertainty.

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.

Revenue from AI data center build-out expected to start ~18 months after anchor customer announcement.