TCS Q4 FY26 Results: Profit Up 29%, Deals $12bn

ADR reaction signals a cautious start

American Depository Receipts (ADRs) of Infosys and Wipro traded lower on Thursday after Tata Consultancy Services (TCS) reported its fourth-quarter earnings. Wipro’s ADR fell over 1% to $1.23, while Infosys was down 2.64% to $13.63. Separately, Infosys ADRs were also described as down just over 2% in early reaction. The ADR move suggested Indian IT stocks could see a muted opening when the market opens on Friday. The reaction came even as TCS delivered results broadly in line with analyst expectations.

What weighed on sentiment

A key overhang was TCS reporting its first-ever decline in dollar revenue for a full financial year. For the year ended March 31, rupee revenue increased 4.6% year-on-year to ₹2,67,021 crore, but it registered a 2.4% decline in constant currency terms. The broader tech tone was also cautious after US software shares fell when Anthropic held back the wide release of a powerful AI model, citing concerns about exposure of hidden cybersecurity vulnerabilities. That risk-off mood in US tech added to pressure on Indian IT ADRs during US trading hours. Against that backdrop, even “in-line” results struggled to lift sentiment.

TCS Q4 FY26 net profit: up sharply quarter-on-quarter

TCS reported a 29% sequential rise in net profit for the quarter ended March 31, 2026. Consolidated net profit came in at ₹13,720 crore versus ₹10,657 crore in the previous quarter. Bloomberg analysts had estimated net profit of ₹13,581 crore, putting the reported number slightly ahead of consensus. Another data point in the provided text also cited net profit of ₹13,718 crore, described as 12% growth in the fourth quarter. Taken together, the quarter’s profit print was not viewed as a major surprise, with analysts characterising the earnings as largely in line with expectations.

Revenue growth, constant currency and sequential performance

In Q4 FY26, TCS reported revenue of ₹70,698 crore. Revenue was also described as rising 10% year-on-year to ₹70,698 crore. On a sequential basis, the company posted a 5.4% quarter-on-quarter rise in rupee revenue to the same ₹70,698 crore figure, with constant currency growth at 1.2%. Another line item noted revenue rose 5.5% to ₹70,698 crore from ₹67,087 crore, and that the revenue number beat an analyst estimate of ₹67,087 crore (as presented in the text). The combination of modest constant currency growth and the full-year constant currency decline explains why markets stayed focused on demand conditions rather than the headline rupee growth.

Operating metrics: EBIT and margin

TCS reported earnings before interest and taxes (EBIT) of ₹17,870 crore in Q4 FY26. This was up 6% from ₹16,889 crore in Q3 FY26, as stated in the exchange-filing summary. EBIT margin stood at 25.3% for the quarter, compared with 25.2% in the third quarter. The margin change was small, but it provided a data point for investors tracking whether large Indian IT firms can hold profitability as clients scrutinise spending and demand more productivity-led pricing.

Deal wins stayed strong, including mega deals

A clear positive in the narrative was deal momentum. The company “bagged three mega deals” in the fourth quarter, with total contract value (TCV) of $12 billion, as per the text. Elsewhere, TCS’ overall deal TCV for the quarter was reported at $12.2 billion, described as a 19.6% quarter-on-quarter increase. Nomura India also flagged that the quarter is seasonally strong and said it expects deal wins should exceed $10 billion, while noting continued investments into AI initiatives. While deal wins were a supportive factor, the ADR reaction indicated investors were weighing conversion of pipeline into near-term revenue more heavily.

AI positioning: revenue milestone in Q4 FY26

Management commentary in the provided text was described as focusing on adapting to AI and positioning the company in an age of uncertainty. A key datapoint was that TCS’ annualised AI revenue crossed $1.3 billion in Q4 FY26. That figure is significant because it quantifies AI-linked revenue at scale, even as macro uncertainty remains part of client decision-making. The text also referenced an “Anthropic partnership” story as part of the broader AI push narrative around the sector.

Valuation snapshot highlighted by analysts

The provided text cited a valuation reference point for TCS: at a current market price (CMP) of ₹2,590, the stock was trading at a price-to-earnings (P/E) multiple of 17.6x its FY28E earnings per share (EPS) of ₹147.2. Analysts also said the results were largely in line with expectations, while strong deal wins were viewed as a likely positive in the earnings card. Another analyst watchpoint came from ICICI Securities, which said it would track commentary on the deflationary impact of sharing AI productivity gains with clients. These reference points underscore that the market focus is as much on pricing power and demand visibility as it is on quarterly beats or misses.

Broader IT context: peers and guidance signals

Beyond TCS, the broader sector commentary in the supplied text described slowing growth and pressure on margins, with companies moving cautiously amid global uncertainties. In a separate FY25 earnings summary included in the text, Infosys reported Q4 net profit of ₹7,033 crore (down 11.75% year-on-year) and revenue of ₹40,925 crore (up 7.92% year-on-year), along with FY26 revenue guidance of 0–3% (constant currency). Wipro’s Q4 FY25 net profit was ₹3,569.60 crore (up 25.93% year-on-year) and revenue was ₹22,504.20 crore (up 1.33% year-on-year), with IT services guidance of (-)3.5% to (-)1.5% in constant currency terms for the referenced period. Those numbers, alongside the ADR declines, framed a sector backdrop where deal wins remain healthy but near-term growth guidance and constant currency trends are closely watched.

Key numbers at a glance

Market impact and what to watch next

The immediate market signal from ADRs was a cautious tone despite solid deal wins and a sequential profit jump at TCS. Investors are likely to focus on the implications of full-year constant currency decline, and whether large deal wins translate into steadier dollar revenue growth. Commentary around AI adoption will also be scrutinised, especially on whether productivity gains are shared with clients in ways that compress pricing. For the near term, the interaction between deal TCV momentum, constant currency growth trends, and operating margin stability remains central to how the sector trades.

Conclusion

TCS’ Q4 FY26 results showed higher sequential profit, stable margins and strong large-deal bookings, alongside an annualised AI revenue milestone. But the first full-year decline in dollar revenue and a risk-off mood in US tech kept ADRs of Infosys and Wipro under pressure. With investors watching demand visibility and pricing dynamics, the next set of management updates on deal ramp-ups, AI-related execution and client spending patterns will be key to sentiment.