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India's TCS misses first quarter revenue view as CEO flags demand contraction
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India's TCS misses first quarter revenue view as CEO flags demand contraction
Jul 10, 2025 4:53 AM

By Sai Ishwarbharath B and Haripriya Suresh

BENGALURU, July 10 (Reuters) - India's Tata Consultancy

Services reported lower-than-expected first-quarter

revenue on Thursday as clients of the $283 billion Indian IT

sector stayed cautious amid tariff-related uncertainty.

Consolidated sales at India's largest IT services firm by

revenue rose 1.3% year-on-year to 634.37 billion rupees ($7.40

billion) in the June quarter against analysts' average

expectation of 646.66 billion rupees, as per data compiled by

LSEG.

Uncertainty around U.S. tariffs has quashed IT companies'

hopes of a revival in client confidence and spending in its

biggest market. A survey in May showed two in five tech

executives had deferred discretionary projects.

"The continued global macro-economic and geo-political

uncertainties caused a demand contraction," TCS CEO K

Krithivasan said.

TCS is the first Indian tech major to report results. Rival

HCLTech reports next week, while Infosys the

week after that.

Last month, IT bellwether Accenture's ( ACN ) shares dropped

as much as 6% after it reported tepid deal-booking numbers in

its quarterly results.

TCS's revenue in four out of its six verticals fell compared

to the same period last year, while banking and financial

services' revenue grew 1% and tech services rose 1.8%.

Its total order bookings stood at $9.4 billion during the

quarter, from $12.2 billion in the previous quarter and $8.3

billion in the year-ago period.

"Deal wins remained muted, with client losses in larger

contracts and flattish margins," said Sagar Shetty, research

analyst at StoxBox.

"While green shoots in banking and tech verticals offer some

respite, softness in U.S. and Europe raises demand concerns," he

said.

TCS's net profit rose 6% in the three-month period to 127.60

billion rupees against analysts' estimate of 122.16 billion

rupees. The profit beat was largely because of a wage hike delay

and a jump in other income.

Its shares listed in Mumbai closed 0.1% lower ahead of the

results.

($1 = 85.6690 Indian rupees)

(Reporting by Sai Ishwarbharath B and Haripriya Suresh; Editing

by Janane Venkatraman and Mrigank Dhaniwala)

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