- TCS expects improved profit margins as the BSNL deal tapers off.
- A new 25,000-seat capacity is planned in Bengaluru.
- TCS aims to expand margins beyond the current 24.5% operating profit margin.
TCS anticipates margin benefits as the over ₹15,000-crore BSNL deal starts tapering down. Chief Financial Officer Samir Seksaria highlighted that as the deal winds down, it would positively affect the company’s overall margin structure.
Although the tapering is expected to continue until FY26, TCS is focusing on balancing any revenue loss through increased business in other markets.
TCS Eyes Profit Margin Growth with BSNL Deal Tapering and Bengaluru Expansion
In addition to the margin expansion, TCS is working on long-term infrastructure growth. The company plans to build a 25,000-seat capacity in Bengaluru on a recently acquired land parcel. This expansion is part of TCS’s strategy to maintain sustainable growth, with an eye on its operating profit margins, which currently stand at 24.5% for the December quarter.
Despite this decline in BSNL-related revenue, TCS plans to mitigate the impact by strengthening its presence in other markets. The company aims to tap into diverse revenue sources across the industries it serves, ensuring that it maintains consistent growth despite the tapering off of the BSNL contract.
TCS’s future growth strategy also includes significant infrastructure investments. Seksaria revealed that TCS is set to develop a long-term, 25,000-seat capacity in Bengaluru, which will enable the company to accommodate its expanding workforce and meet future business demands.
Looking at future margins, TCS has expressed aspirations to reach a profit margin band of 26-28%, a target it has yet to achieve. While Seksaria refrained from providing a specific timeline for reaching this band, he assured that TCS has various levers in place to push its margins higher in the coming quarters.
TCS’s strategic adjustments, including tapping into new markets and expanding infrastructure, position the company well to offset the tapering BSNL deal and enhance its profitability.
“Samir Seksaria mentioned that as the BSNL deal tapers down, it would bring margin benefits at an overall level,” indicating a positive shift for TCS’s profit trajectory.
