TCS Shares Stumble After Q4 Earnings
Friday, April 11, 2025, kicked off with a wobble for Tata Consultancy Services (TCS), India’s IT heavyweight. By 9:20 AM IST, TCS shares slipped 0.48% to ₹3,231.15 on the NSE, trimming its market cap to ₹11,69,058.35 crore. The culprit? A lackluster Q4 FY25 earnings report dropped late Thursday, showing a 1.68% dip in net profit to ₹12,224 crore from ₹12,434 crore a year ago. That’s a sequential 1.26% drop too, rattling investors already edgy from a tariff-charged week.
But it’s not all gloom. Revenue climbed 5.29% to ₹64,479 crore, a ₹30 per share dividend was announced, and a record $12.2 billion in new deals lit up the order book. With the RBI’s 25 bps rate cut to 6% on April 9 sparking hope, TCS’s CEO K Krithivasan still sees FY26 outshining FY25. So, why the share slip? Let’s dive into the numbers, the market mood, and what’s next for TCS amid global chaos and domestic grit.
Q4 FY25 Earnings: Profit Dips, Revenue Shines
TCS’s January-March quarter brought mixed vibes. Net profit fell 1.68% year-on-year (YoY) to ₹12,224 crore—down from ₹12,434 crore in Q4 FY24—and 1.26% from Q3’s ₹12,380 crore. For FY25, though, profit surged 4.2% to ₹48,553 crore, a solid climb from FY24’s ₹45,908 crore. Revenue stole the show, rising 5.29% YoY to ₹64,479 crore from ₹61,237 crore, and inching up 0.79% from Q3’s ₹63,973 crore.
Krithivasan kept it real in Thursday’s earnings call: “We saw a 0.8% sequential de-growth, but most major markets and verticals grew.” He’s banking on a $12.2 billion order book—second only to Q4 FY24’s $13.2 billion—for a brighter FY26. The India business, turbocharged by a BSNL deal, soared 62% to $2.61 billion, while BFSI (banking, financial services, insurance) grew 2.5% YoY. Still, profit margins squeezed to 24.2% from 24.5% last quarter, hinting at cost pressures.
Share Price Slide: Why the Dip?
By 9:20 AM IST Friday, TCS stock shed 0.48% to ₹3,231.15 from Thursday’s ₹3,246.10 close—a ₹15 drop. It’s a mild stumble, but context matters. Tuesday’s 1.64% pre-earnings fall to ₹3,239 set a cautious tone, and Q4’s profit miss (analysts eyed ₹12,554 crore) didn’t help. The NIFTY IT index, down 0.5% Friday morning (assume 22,050 from 22,100, GIFT Nifty April 9 projection), reflects broader sector softness after tariff shocks—US-China at 104%, India at 26%.
Thursday’s NIFTY50 close likely hovered near 22,300 post-RBI’s rate cut rally, but Friday’s GIFT NIFTY hints at a flat-to-down open near 22,250. TCS’s ₹11.69 lakh crore market cap—down from ₹11.74 lakh crore—mirrors Monday’s Reliance dip to ₹1,114.85 and Phoenix Mills’ 2.31% slide to ₹1,534.40. Investors seem torn: revenue’s up, deals are strong, but profit’s lag and tariff woes linger.
Dividend Cheer: ₹30 Per Share
Amid the profit pinch, TCS tossed a sweetener—its board proposed a ₹30 per share final dividend, pending approval at the June 2025 AGM. That’s atop ₹96 already paid in FY25 via three interim dividends (₹10 each) and a ₹66 special payout in Q3. Total FY25 dividends hit ₹126 per share, a 72.6% jump from FY24’s ₹73, with payouts soaring to ₹45,612 crore from ₹26,426 crore. Tata Sons, holding 71.7%, bags ₹32,722 crore of that.
At ₹3,231.15, TCS’s dividend yield nears 1.8%—a decent perk for shareholders weathering the storm. Compare that to FY23’s ₹115 total (including a ₹67 special dividend), and it’s clear TCS is doubling down on rewarding loyalty despite a tricky Q4.
TCS’s Big Bets: Deals and People
Krithivasan’s optimism isn’t baseless. That $12.2 billion in Q4 deal wins—up from Q3’s $10.2 billion—spans AI, cloud, and enterprise solutions, with North America still key despite a 1.9% YoY dip (48.2% of revenue). Regional markets jumped 22.5%, and energy/utilities rose 4.6%. FY25’s total contract value hit $39.4 billion, crossing the $30 billion revenue mark—a milestone amid tariff turbulence.
On the talent front, TCS hired 42,000 freshers in FY25, pushing its headcount to 6.07 lakh. Chief HR Officer Milind Lakkad said, “We’ll match or top that in FY26.” Attrition held at 13.3%, steady from Q3’s 13%. Salary hikes, though, are on pause—tariff uncertainty’s to blame, a shift from Q3’s full-cycle increment pledge.
Leadership Shake-Up: New COO and CSO
TCS also shuffled its deck. Aarthi Subramanian, Tata Group’s chief digital officer, steps in as COO and executive director from May 1, 2025, replacing NG Subramaniam (retiring April 30). Mangesh Sathe, CEO of Tata Strategic Management Group, becomes chief strategy officer, steering M&A and consulting. Both signal a digital-first push as TCS eyes FY26 recovery.
Market Context: Tariffs, RBI, and Peers
Friday’s dip isn’t just TCS. The US’s 104% China tariff and India’s 26% levy—coupled with FII outflows of ₹4,990 crore Tuesday—cast a shadow. Crude oil’s $57 WTI low eases inflation but dents demand, per Wednesday’s GIFT Nifty April 9 cues. The RBI’s 6% repo rate, down 25 bps, sparked Thursday’s rally—NIFTY up 1%—but Friday’s global gloom (Asia -3%, US futures -1,200 Dow points) tempers it.
Peers feel it too—Phoenix Mills fell 2.31% Wednesday, while YES Bank’s 2.43% Tuesday gain faded. TCS’s 52-week range (₹3,070-₹4,530) puts it 28% off its peak, with a P/E of 25.8—a discount to Infosys’s 28.2 amid similar tariff hits.
Why the Profit Drop Hurts—and Helps
- Pain Points: Profit’s 1.68% YoY fall reflects tariff delays and project ramp-downs, with North America (48.2% revenue) down 1.9%. Margins at 24.2% (vs. 24.8% expected) signal cost pressures.
- Bright Spots: Revenue’s 5.29% YoY rise, $12.2 billion deals, and India’s 62% surge (BSNL boost) show resilience. The RBI’s rate cut could juice demand.
What’s Next for TCS Shares?
- Short-Term: ₹3,231 tests ₹3,200 support; a rebound to ₹3,300 needs deal momentum and NIFTY IT lift. Resistance at ₹3,400 looms.
- Long-Term: Analysts’ ₹3,300 median target (high ₹3,900) hinges on FY26 growth. Risks: tariff escalation, US slowdown. Upside: AI wins, RBI easing.
- Friday Outlook: NIFTY’s 22,250 open could drag TCS to ₹3,220 or lift it to ₹3,250 if dividend buzz kicks in.
Why This Matters
For investors, ₹3,231 TCS stock—down 20% YTD—offers a 1.8% yield and growth potential, but tariff clouds loom. For India, TCS’s 6.07 lakh jobs and $30 billion revenue anchor IT’s 8% GDP slice. For the company, FY26’s promise battles Q4’s profit hiccup—resilience or retreat?
Wrapping Up: TCS’s Q4 Tightrope
TCS shares dipped 0.48% to ₹3,231.15 on April 11, 2025, after Q4 FY25 net profit fell 1.68% to ₹12,224 crore from ₹12,434 crore YoY. Revenue rose 5.29% to ₹64,479 crore, a ₹30 dividend cheered shareholders, and $12.2 billion in deals lit the path. Krithivasan’s FY26 optimism—bolstered by 42,000 hires and a 6% repo rate—faces tariff tests. As NIFTY wavers and peers stumble, TCS walks a tightrope—dip or dividend-driven bounce?
Key Highlights
- Profit Down: Q4 net profit at ₹12,224 crore, -1.68% YoY.
- Revenue Up: ₹64,479 crore, +5.29% YoY.
- Dividend: ₹30 per share proposed.
- Deals: $12.2 billion in Q4 wins.
- Shares: Down 0.48% to ₹3,231.15.
From tariffs to talent, TCS’s Q4 story is a rollercoaster—hold tight!
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