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 operating margin fell 1.32 percentage points QoQ to 23.96% as expenses grew 4.03% against revenue growth of 2.23%.
- YoY net profit rose 4.69% to Rs 13,420 cr as expenses grew 14.68%, faster than revenue growth of 13.93%, while the tax rate rose 0.71 percentage points.
- The stock gained 10.71% five sessions after the results, compared with a 2.5% median absolute move after its last eight results.
Price around the results
Margin breaks below its three-quarter range
TCS's consolidated revenue grew 2.23% QoQ, but expenses rose 4.03%, pulling operating profit down 3.09% and narrowing operating margin by 1.32 percentage points. Margin had stayed between 25.17% and 25.28% from Q2FY26 through Q4FY26 before falling to 23.96% in Q1FY27. It remained 8.22 percentage points above the 15.74% median for the 12 IT peers that had reported.
Higher costs limited the conversion of YoY growth
Revenue rose 13.93% YoY, but expenses grew faster at 14.68%, reducing operating margin by 0.50 percentage points. Net profit increased only 4.69% as the tax rate rose 0.71 percentage points and interest expense climbed 40.00%. Other income represented 8.74% of pre-tax profit, making it a material contributor to reported earnings.
The initial market move was modest, then widened
The stock rose 0.95% on the first session after the results, below the 2.5% median absolute move after its last eight results; that history includes five declines and three gains. The move later reached 6.44% on the next session and 10.71% by t+5, although the observed reaction overlaps a corporate action. The results were filed after market close.
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 | ₹1,568 cr | ₹757 cr | +107.13% | -5.54% |
| Expenses | ₹54,958 cr | ₹52,828 cr | +4.03% | +14.68% |
| Operating profit | ₹17,317 cr | ₹17,870 cr | -3.09% | +11.62% |
| Operating margin (%) | 23.96% | 25.28% | — | — |
| 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 23.96% compares with a Information Technology sector median of 15.74% across 12 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 23.96% toward the 25.17%-25.28% range seen in Q2FY26-Q4FY26.
- Whether expense growth falls below revenue growth after 14.68% versus 13.93% YoY in Q1FY27.
- Whether other income remains near 8.74% of pre-tax profit and the tax rate near 25.21%.