TCS Q4 Revenue Grows 5.6% QoQ, Buoyed by $2.3 Bn AI Run-Rate, HyperVault
By C P Balasubramanyam ·
Tata Consultancy Services (TCS) grew sequentially in the fourth quarter of FY26, even as full-year performance reflected continued demand weakness in key markets.
Revenue for Q4 FY26 rose 5.4% quarter-on-quarter to ₹70,698 crore ($7.64 billion), or 1.2% in constant currency terms, marking the third consecutive quarter of sequential growth. Its net profit jumped nearly 12% year-on-year in Q4 to ₹13,718 crore ($1.48 billion).
For the full year, its net profit was ₹49,210 crore ($5.32 billion)—up marginally from ₹48,553 crore in FY25—while revenue stood at ₹2.67 lakh crore ($29 billion), up 4.6% year-on-year, but down 2.4% in constant currency, highlighting persistent softness in underlying demand.
This is broadly in line with analyst expectations of muted expansion.
In a key announcement, the company disclosed that its annualised AI revenue run rate crossed $2.3 billion, signalling rapid scale-up in AI-led deals. The figure, however, represents a run rate based on Q4 performance rather than actual full-year revenue.
“FY26 marked a pivotal year for enterprise AI adoption,” said Aarthi Subramanian, Executive Director and Chief Operating Officer at TCS, in the post-earnings call. “In Q4, our annualised AI revenues surpassed $2.3 billion, driven by the accelerated deployment of AI solutions.”
She added that investments in data centre subsidiary HyperVault have helped forge strategic partnerships with companies including OpenAI, AMD, and ABB.
TCS reported total contract value (TCV) of $40.7 billion for FY26, including $12 billion in Q4—among the highest in its history. The company closed three mega deals in the quarter and five over the year, indicating sustained client appetite for large transformation programmes.
Chief Executive Officer K Krithivasan said the quarter marked the third consecutive period of sequential growth, supported by strong deal wins and a robust pipeline. “While macroeconomic headwinds continue, we see sustained customer conviction in technology investments,” he said.
The company also expanded its client base across segments, with 66 $100+ million clients, the number of $50+ million clients increased to 139, and $1+ million clients increased to 1,397.
Profitability improved during the year, with operating margin at 25%, up 70 basis points year-on-year, the highest in four years. Q4 operating margin stood at 25.3%. Net margin for FY26 was 19.8%, up 80 basis points.
Chief Financial Officer Samir Seksaria said the company continued to invest in growth through its ‘Build–Partner–Acquire’ strategy, including acquisitions such as Coastal Cloud and List Engage, alongside the launch of HyperVault. “Even as we scaled investments in AI-led opportunities, margins expanded, reflecting strong operational discipline,” he said.
TCS ended the year with a headcount of 5,84,519 employees, while continuing to invest in skilling. The company added 2,356 employees during the quarter, an increase from 5,82,163 during Q3.
This included 69 million learning hours, up 23% year-on-year, and over 270,000 employees trained in AI/ML at higher proficiency levels.
Chief HR officer Sudeep Kunnumal said the company has implemented annual salary increases effective April 1 and continues to invest in building an AI-ready workforce.
In a separate announcement, TCS also announced the renewal of a multi-year strategic partnership with Marks and Spencer, extending collaboration spanning over a decade.
As part of the engagement, TCS will support the London-based retailer’s enterprise-wide technology transformation, including modernising legacy systems and embedding AI to enable an omnichannel, data-driven operating model.