TCS Q1 Dividend: IT major declares ₹11/share interim dividend along with Q1 results. Check details

Mumbai, July 10, 2025 — Tata Consultancy Services (TCS), India’s largest IT services exporter, has announced an interim dividend of ₹11 per share along with its financial results for the first quarter of the financial year 2025-26 (Q1FY26). The announcement underscores the company’s consistent focus on shareholder value despite a mixed operating performance amid global macroeconomic headwinds.

TCS Declares ₹11 Interim Dividend Per Share

The Board of Directors of TCS declared an interim dividend of ₹11 per equity share for the quarter ended June 30, 2025. The record date for determining shareholders eligible for the dividend payout has been fixed as July 20, 2025, while the payment will be credited on or before August 2, 2025.

This interim dividend is part of the company's regular dividend policy and reaffirms TCS’s strong balance sheet position and robust cash flow generation.

“The interim dividend reflects our ongoing commitment to returning capital to shareholders while maintaining sufficient resources for strategic investments and operations,” the company said in an official filing.

TCS Q1FY26 Financial Highlights

TCS reported consolidated revenue of ₹62,430 crore for the June quarter, representing a year-on-year (YoY) growth of 6.3% in rupee terms. However, revenue in constant currency terms saw a more modest growth of 3.1% YoY.

Net profit for the quarter stood at ₹11,120 crore, an increase of 9.4% YoY, driven by strong operational efficiencies, higher offshoring, and better utilization.

Key Financial Metrics:

• Revenue: ₹62,430 crore (up 6.3% YoY)

• Net Profit: ₹11,120 crore (up 9.4% YoY)

• Operating Margin: 24.2%, improving 80 basis points sequentially

• EPS: ₹30.15

Management Commentary

Rajesh Gopinathan, CEO and MD of TCS, stated,

“Despite the uncertain demand environment, we delivered a resilient performance in Q1 with margin expansion and strong order bookings. The India market remains robust, while we are seeing early signs of recovery in North America and Europe.”

CFO Samir Seksaria added,

“Our cost optimization initiatives and operational discipline led to margin improvement this quarter. We continue to balance investments in growth with shareholder returns.”

Segment-Wise Performance

• BFSI (Banking, Financial Services, and Insurance) continued to remain under pressure, with clients delaying discretionary tech spending.

• Retail and Consumer Business saw a rebound, contributing significantly to the topline.

• India business grew in double digits on the back of strong demand from public sector and manufacturing.

• North America, which contributes over 50% to TCS’s revenue, showed marginal sequential growth as enterprise clients remained cautious.

Order Book and Client Wins

TCS announced a Total Contract Value (TCV) of $10.2 billion in Q1FY26, slightly higher than the $10 billion TCV from the previous quarter. This includes multiple large deals across BFSI, manufacturing, and telecom sectors.

“Our healthy pipeline of deals gives us confidence in our medium-term outlook,” said N. Ganapathy Subramaniam, COO and Executive Director at TCS.

Dividend Track Record & Payout Strategy

TCS has consistently rewarded shareholders through dividends and buybacks. In FY25 alone, the company returned over ₹40,000 crore to shareholders through a combination of dividends and a ₹18,000 crore share buyback.

The ₹11 interim dividend declared in Q1FY26 is in line with TCS’s approach to maintain a dividend payout ratio of 80-100% of free cash flows, as stated in its capital allocation policy.

Market Reaction and Analyst Views

TCS shares closed marginally higher on the BSE at ₹3,850.45, up 0.7% from the previous close, as investors welcomed the steady financial performance and interim dividend announcement.

Market experts believe the dividend reflects strong cash generation but caution that topline growth may remain muted in the coming quarters.

Siddharth Khemka, Head of Retail Research, Motilal Oswal, said:
“While TCS has done well on margins, revenue growth is still below historical averages. We expect growth to accelerate in H2FY26 if global macro conditions stabilize.”

Karan Shah, IT sector analyst at ICICI Securities, noted:
“The dividend payout is a positive surprise, but the management commentary on North America recovery is what markets will focus on. FY26 could be a turnaround year for IT.”

Investor Outlook

TCS remains a bellwether for India’s IT sector and its Q1FY26 results signal cautious optimism. While growth in key geographies is expected to remain soft in the near term, the company’s solid execution capabilities, client retention, and healthy deal pipeline offer a favorable medium-term outlook.

Long-term investors may continue to hold TCS stock given its strong return ratios, resilient cash flows, and consistent shareholder payouts, while new investors could consider accumulating on dips.