Speaking to ET Now, TCS Chief Financial Officer Samir Seksaria said the company benefited from rupee depreciation, which acted as a “tailwind,” contributing significantly to profitability. The company follows a structured hedging policy, covering receivables two quarters ahead to manage volatility risks.
ETMarkets.comSequential margins improved by 10 basis points, driven by a combination of currency gains, better realisation and productivity improvements. However, these gains were partly reinvested into strategic priorities, including workforce initiatives, partnerships and compliance-related costs such as new labour code changes.
Strategic investments offset margin gains
TCS allocated resources across multiple fronts, including higher subcontracting costs, recruitment, and partnership-led growth initiatives. The company also continued to invest in its “build, partner, acquire” strategy, aimed at accelerating time-to-market and capturing emerging opportunities in artificial intelligence (AI) and digital transformation.
Seksaria noted that while traditional growth relied heavily on building in-house capabilities, TCS is now increasingly leveraging acquisitions and ecosystem partnerships to scale faster and broaden its offerings.
The company has announced collaborations with global technology players, including OpenAI and leading hyperscalers, as part of its push into AI-led services. It is also investing heavily in infrastructure, research, and employee training, with around $1 billion earmarked for capability building.
AI talent hiring gains momentum
On the talent front, Sudeep Kunnumal, Chief Human Resources Officer at TCS, highlighted a shift towards skill-based hiring, particularly for AI and cybersecurity roles.The company is increasingly leveraging platforms like CodeVita, its global coding competition, and HackQuest for cybersecurity talent acquisition. These initiatives focus on identifying demonstrable skills rather than traditional hiring metrics, reflecting the evolving demands of the tech industry.
Kunnumal said TCS continues to attract top talent from universities and the lateral market, especially for next-generation technologies, while maintaining an optimistic hiring outlook aligned with demand trends.
Attrition edges up slightly
Voluntary attrition in the IT services segment rose marginally to 13.7%, up 20 basis points from the previous quarter. However, the company expects attrition levels to decline in the coming quarters as employee engagement and retention initiatives take effect.
TCS also confirmed that its workforce realignment exercise, initiated earlier in the financial year, has now been completed. The company did not report any exceptional costs in the latest quarter related to this restructuring.
Growth mix: Organic leads, M&A adds edge
Revenue growth remained largely organic, with only a small contribution from acquisitions. Around 40 basis points of growth came from inorganic sources, underscoring that TCS continues to rely primarily on its core business momentum.
As global enterprises ramp up spending on AI, cloud, and digital transformation, TCS’s strategy of combining organic capability building with partnerships and acquisitions positions it to capture a larger share of technology budgets.
With currency tailwinds, disciplined cost management, and aggressive investments in future-ready capabilities, TCS appears focused on balancing near-term profitability with long-term growth in a rapidly evolving tech landscape.