Tata Consultancy Services (TCS), India’s biggest information technology (IT) services firm, has reaffirmed that boosting employee compensation remains a central concern, even as pressures on profitability persist.
Addressing the media after the company's latest quarterly results, TCS Chief Financial Officer (CFO) Samir Seksaria underscored that salary increases for its workforce of over 6 lakh people are a “priority”, though he stopped short of offering a concrete timeline.
Speaking to news agency PTI, Seksaria also drew a contrast with rival IT players by stating TCS has “rarely” delayed such hikes. Meanwhile, Executive Vice-President and Chief Human Resources Officer (CHRO) Milind Lakkad, during a briefing on July 10, clarified that no formal decision has been reached on wage revisions yet. Typically, TCS announces its salary hikes effective from April 1 each year.
As highlighted by LiveMint, the proposed wage adjustments generally weigh on the company's margins, with Seksaria noting that annual hikes tend to dent the operating profit margin by more than 1.50%. In the first quarter of the 2025-26 financial year, TCS's margins slipped by 20 basis points to 24.5%, falling short of its longer-term ambition of 26-28%.
Employee retention has also emerged as a fresh worry. The attrition rate climbed to 13.8% for the twelve months ending June, a slight uptick from 13.3% in the previous quarter. Seksaria described the trend as “concerning” and signalled that TCS would prioritise holding on to experienced talent, rather than aggressively pursuing lateral hires, especially as the firm currently has capacity. Any ramp-up in hiring would be tied to stronger demand.
Despite facing macroeconomic and geopolitical headwinds that have constrained growth, TCS reported a 6% rise in consolidated net profit to Rs 12,760 crore for the April-June quarter, up from Rs 12,040 crore a year earlier. Revenue inched up by 1.3% to Rs 63,437 crore, compared to Rs 62,613 crore in the corresponding period last year.
Seksaria insisted that “growth with profitability” remains the dual pillar of the company’s strategy, cautioning that profitability without topline momentum does little for long-term prospects.
The company, however, does not intend to curb investments outright. As LiveMint reported, Seksaria spoke about possible “realignments”, such as developing only portions of proposed facilities depending on evolving needs. On the acquisition front, TCS appears open yet measured, with the CFO stating the firm wouldn’t pursue buyouts merely to inflate revenues, though it continues to monitor the market for viable opportunities.
