TCS Margin Trend — Quarter by Quarter

TCS's EBITDA margin moved from 23.2% in Q1 FY24 to 27.3% in Q4 FY26 across 9 quarters. Management commentary below explains the cost and pricing drivers mentioned on calls.

EBITDA Margin by Quarter

Quarter	EBITDA Margin (%)	YoY Change
Q4 FY26	27.3%	+93 bps
Q3 FY26	25.2%	—
Q2 FY26	25.2%	+70 bps
Q4 FY25	24.2%	-30 bps
Q3 FY25	24.5%	+40 bps
Q1 FY25	24.7%	—
Q4 FY24	26.0%	—
Q2 FY24	24.3%	+110 bps
Q1 FY24	23.2%	—

What management said about ebitda margin

Q4 FY26 · Wage hikes: 150-200 bps margin headwind expected

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

Q4 FY26 · 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.

Q3 FY26 · 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.

Q2 FY26 · 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.

Q1 FY26 · Margin improvement levers: utilization, productivity, pyramid

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

Q4 FY25 · 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.

Q3 FY25 · 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.

Q2 FY25 · Margin aspiration to exit Q4 at 26%

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

Q1 FY25 · 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.

Q4 FY24 · 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.

Q4 FY24 · 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.

Q3 FY24 · 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.