Tata Consultancy Services (TCS) has announced annual salary hikes for employees effective April 1, alongside reporting steady workforce growth and strong financial performance for the January–March quarter (Q4 FY26).
The IT major added 2,356 employees during the quarter, taking its total workforce to 5,84,519. This marks a 0.40 per cent increase from 5,82,163 employees recorded in the previous quarter, reflecting continued hiring despite a cautious global demand environment.
Workforce growth and diversity
TCS highlighted that its workforce continues to remain diverse, with employees from 149 nationalities. Women employees accounted for 35.1 per cent of the total workforce, underlining the company’s ongoing focus on inclusivity.
The company also emphasised its investment in building a future-ready workforce. Hiring during the quarter included both experienced professionals and fresh graduates from campuses, aligning with its long-term growth strategy.
Salary hike and HR focus
The announcement of annual salary increases across all grades, effective April 1, comes as a positive development for employees amid a competitive IT job market.
Sudeep Kunnumal said the company remains focused on strengthening its workforce capabilities, particularly in emerging areas. He noted that building an AI-first culture and equipping employees with AI-ready skills were key priorities in FY26 and would continue into FY27.
This move is expected to boost employee morale while reinforcing TCS’s positioning as a preferred employer in the IT sector.
Attrition sees marginal rise
Despite the positive hiring trend, TCS reported a slight increase in attrition levels. The company’s voluntary attrition rate in IT services rose to 13.7 per cent on a last-twelve-month basis, compared to 13.5 per cent in the previous quarter, marking a 20 basis points increase quarter-on-quarter.
While the rise is marginal, it indicates continued competition for skilled talent in the IT industry, particularly in high-demand technology domains.
Strong financial performance
TCS delivered better-than-expected financial results for Q4 FY26. The company reported revenue of ₹70,698 crore, reflecting a 9.6 per cent year-on-year growth.
Net profit for the quarter rose 12 per cent year-on-year to ₹13,718 crore, demonstrating resilience in a challenging global environment.
The strong performance was driven by sustained demand for digital transformation services and the company’s ability to adapt to evolving client requirements.
Dividend announcement and market view
Along with its quarterly results, TCS also announced a final dividend of ₹31 per share. The company stated that the dividend would be paid after the conclusion of its 31st Annual General Meeting, subject to shareholder approval.
However, not all market analysts are optimistic. Brokerage firm Jefferies has maintained an “Underperform” rating on the stock, citing limited signs of a significant demand recovery. The firm has set a target price of ₹2,275, indicating a potential downside of around 12 per cent.
On Thursday, TCS shares closed at ₹2,589, gaining ₹29.80 or 1.16 per cent during the trading session.
Outlook for FY27
Looking ahead, TCS is expected to continue focusing on emerging technologies such as artificial intelligence, cloud computing and automation. The company’s emphasis on upskilling employees and aligning with client needs is likely to play a crucial role in sustaining growth.
While macroeconomic uncertainties and cautious client spending may impact short-term performance, the company’s strong fundamentals and strategic investments position it well for long-term growth.
Conclusion
TCS’s decision to roll out annual pay hikes, coupled with steady hiring and solid financial results, reflects its confidence in future growth. However, rising attrition and cautious market sentiment indicate that challenges remain. As the IT sector navigates evolving global dynamics, TCS’s focus on innovation and workforce development will be key to maintaining its leadership position.
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