TCS Q4 results timing, dividend: Why tariff impact on client demand holds key

TCS Q4 earnings preview: India's largest IT exporter Tata Consultancy Services Ltd (TCS) is all set to announce its March quarter results after 3:30 pm. It would be hosting a press conference at 5:30 pm and earnings conference call with analysts at 7 pm later today. While the K Krithivasan-led firm does not offer guidance, the Street will be keenly following the impact of recent spate of US tariffs on client demand (sentiment), especially discretionary, and whether one can expect a better FY26 than FY25.  

TCS Q4 results: What to expect? 
For TCS, HDFC Institutional Equities expects adjusted profit to rise 1.1 per cent YoY to Rs 12,570 crore on 5.9 per cent rise in sales at Rs 64,859 crore. Ebit margin is seen at 24.9 per cent, down 110 basis points YoY. 

Nirmal Bang said TCS reported strong deal bookings, but actual revenue conversion has been sluggish, impacting the overall growth. It expects TCS deal wins to be in the $10-11 billion range. Profit is seen flat at Rs 12,432 crore. 

"We expected a decline of 0.2 per cent QoQ in CC terms due to decline in BSNL revenues. Expect BFSI to be the growth driver while manufacturing, Retail and Healthcare to be sluggish," Nirmal Bang said.

Kotak said the benefit of the rupee depreciation will be eaten away by promotions and investments in the business, resulting in disappointing margin performance. It sees deal wins at $11 billion against $13.2 billion YoY.

Kotak said investor focus will be on the impact of  tariffs and the recent chain of macro deterioration in the US on business and the outlook for FY2026. 

Investors would also seek the reasons for underperformance in growth in developed markets, any project cancelation or delay since January 2025 and their impact on the FY2026 growth outlook and the outlook of the 
financial services vertical. 

IT analysts said the IT sector deal activity would be centred more around cost optimisation and takeout initiatives and said while GenAI is taking centre stage, it is also driving pricing changes as enterprises and hyperscalers integrate AI-efficiency into their pricing model. 

TCS dividend, dividend history
The TCS board, meanwhile, will recommend a final dividend, if any, on the equity shares of the company for the financial year ending March 31, 2025. It had earlier declared dividend of Rs 10 per share and a special dividend of Rs 66 in the December quarter. The software exporter had earlier declared Rs 10 each dividends in Q1 and Q2.
The software announced a total dividend of Rs 73 per share in FY24, amounting to Rs 16,290.

Tariffs, US slowdown: Why they matter?
The prevailing tariff war is likely to hit the US economic growth in quarters to come. BNP Paribas analyst Kumar Rakesh said as tariffs come into effect, CPG & Retail are the first verticals to see the impact. The uncertainty created by higher tariff rates and counter tariffs could also  impact the manufacturing and logistics verticals of Indian IT companies.

Indian IT Services industry’s revenue growth has a +0.53 correlation with US real GDP growth since 1992.  "Our analysis of the last four downcycles in the US and its impact on Indian IT Services  export revenue growth suggest a 1.5 percentage points slowdown in US real GDP growth would impact Indian IT services revenue growth by 5.1 percentage points. This would imply FY26E Indian IT Services USD revenue will decline by 0.4 per cent YoY," the BNP Paribas analyst said. 

"A flattish YoY revenue growth for the industry we believe is a reasonable worst-case scenario, as a starting point for analysis. We do note that Indian IT Services industry revenue has never grown at a  pace lower than the US real GDP growth and has never seen a YoY decline, at least since 1992," Kumar said.