How will TCS overcome the 18% decline in Q1 order book to $8.3 billion?

India’s leading IT services company, Tata Consultancy Services (TCS), experienced a significant decline in deal wins during the first quarter of FY25, with an order book totaling $8.3 billion.

The total contract value (TCV) for this quarter was 18.6% lower than the $10.2 billion from the same period last year and 37% lower than the previous quarter, according to a company announcement on July 11.

In the March quarter of FY23, TCS, a Tata group company, had reported a record-high order book of $13.2 billion.

Notable deals from the recent quarter include a generative AI and cloud transformation deal with Xerox, a GenAI partnership with Amazon Web Services, and a BFSI deal with Burgan Bank.

“I am pleased to report a strong start to the new fiscal year with all-around growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies, and invest in innovation, including a new AI-focused TCS PacePort™ in France, an IoT lab in the US, and expanding our delivery centers in Latin America, Canada, and Europe,” said TCS CEO and Managing Director, K Krithivasan.

Geographically, the demand was led by the Indian market, which grew 61.8% YoY in constant currency (CC) terms, followed by the MEA at 8.5%, Asia Pacific at 7.6%, and Latin America at 6.3%.

Core markets, including North America, saw a decline of 1.1% in CC YoY. The UK grew by 6%, while Continental Europe only saw a 0.9% increase.

Among verticals, the BFSI sector, which accounts for 30-40% of revenue, continued to decline, dropping 0.9% YoY in CC terms. The consumer business fell by 0.3%, technology services by 3.9%, and communication and media by 7.4%.

However, regional markets continued to grow at 37.7% YoY. Manufacturing was up 9.4%, life sciences and healthcare grew by 4%, and energy resources and utilities saw a 5.7% increase YoY.

TCS reported a 9% year-on-year increase in net profit, reaching Rs 12,040 crore for the quarter. Its revenue from operations rose by 5.4% to Rs 62,613 crore.