Tata Consultancy Services(TCS) expects its profit margins to improve as the impact of its BSNL contract tapers off in the coming quarters. The company’s Chief Financial Officer, Samir Seksaria, revealed that the tapering of the over Rs 15,000-crore deal, which has significantly contributed to TCS’s revenue growth, will provide a positive effect on margins as it winds down by FY26. However, Seksaria declined to specify the exact margin impact from the deal’s reduction.
TCS reported a 24.5% operating profit margin for the December quarter and is focused on expanding this figure. Seksaria highlighted that the company would offset the reduced revenue from BSNL with growth from other sources, ensuring continued financial stability.
Looking ahead, TCS is expanding its presence in Bengaluru, acquiring land to create a long-term capacity for over 25,000 seats. This expansion in Whitefield, a key area for the IT industry, is part of the company’s broader strategy to build campuses across the country. With around 70,000 employees already in Bengaluru, the new capacity is designed to meet the growing demand for its services.
TCS also aims to leverage a mix of lease and build strategies in its expansion projects, including the recent Rs 1,625-crore land acquisition from a Tata group company. The company is also benefiting from the ongoing depreciation of the rupee against the dollar, though currency fluctuations have had a neutral impact on its margins.
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