TCS Q1FY27 consolidated revenue rises 13.93% yoy to Rs 72,275 cr
Consolidated net profit rose 4.69% yoy to Rs 13,420 cr, while operating margin fell to 23.96%.
Filed 09 Jul 2026, 15:52 IST · after market close · Tata Consultancy Services Ltd (TCS)
Key takeaways
- Consolidated revenue grew 13.93% year on year, but operating margin fell 0.93 percentage points to 25.67% as expenses grew 15.37%.
- Sequentially, operating margin narrowed 1.60 percentage points because expenses rose 4.47%, twice the 2.23% increase in revenue.
- The stock gained 10.71% over five sessions, well above its 2.5% median post-results move despite a 0.95% first-day rise.
Price around the results
Revenue growth did not translate into comparable profit growth
TCS delivered 13.93% year-on-year revenue growth in the consolidated quarter, but operating profit grew only 9.96%. The gap reflects a cost base that expanded faster than sales, while net profit growth was further limited by a 45.78% fall in other income. Other income still contributed 5.02% of pre-tax profit, making it a meaningful component of reported earnings.
Sequential margin pressure came from faster expense growth
Revenue increased 2.23% from Q4FY26, while expenses rose 4.47%, resulting in a 1.60 percentage-point contraction in operating margin. Interest expense also increased 3.02% sequentially, adding to the pressure below operating profit. The tax rate rose 0.28 percentage points sequentially and 0.71 percentage points year on year.
Margin fell after three quarters near 27%
Operating margin had held between 27.23% and 27.32% from Q2FY26 through Q4FY26 before falling to 25.67% in Q1FY27. The current margin remains 6.99 percentage points above the 18.68% median for the 14 Information Technology peers that have reported, ranking 13th from the bottom. Year on year, the margin decline was 0.93 percentage points.
The five-session share move was unusual for TCS
The stock rose 0.95% on the first session after the results and was up 10.71% after five sessions. Its first-day move was below the 2.5% median absolute move after the previous eight results, while the five-session gain was substantially larger. TCS had risen after three of those eight results and fallen after five; the reaction series is incomplete and overlaps a corporate action.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹72,275 cr | ₹70,698 cr | +2.23% | +13.93% |
| Other income | ₹900 cr | ₹757 cr | +18.89% | -45.78% |
| Expenses | ₹53,719 cr | ₹51,422 cr | +4.47% | +15.37% |
| Operating profit | ₹18,556 cr | ₹19,276 cr | -3.74% | +9.96% |
| Operating margin (%) | 25.67% | 27.27% | — | — |
| Interest | ₹273 cr | ₹265 cr | +3.02% | +40.00% |
| Depreciation | ₹1,239 cr | ₹1,406 cr | -11.88% | -8.96% |
| Profit before tax | ₹17,944 cr | ₹18,362 cr | -2.28% | +5.68% |
| Tax | ₹4,524 cr | ₹4,578 cr | -1.18% | +8.75% |
| Net profit | ₹13,420 cr | ₹13,784 cr | -2.64% | +4.69% |
| EPS (₹) | ₹36.90 | ₹37.92 | -2.69% | +4.62% |
Operating margin of 25.67% compares with a Information Technology sector median of 18.68% across 14 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.95% | -0.07% |
| Next session | +6.44% | — |
| 5 sessions | +10.71% | +9.16% |
Volume on the results session was 1.46× its 20-day average.
What to watch
- Whether operating margin recovers from 25.67% after the 1.60 percentage-point sequential decline.
- Whether expense growth falls below the 4.47% sequential pace after exceeding revenue growth of 2.23%.
- Whether net profit growth improves from 4.69% year on year as other income accounts for 5.02% of pre-tax profit.