TCS reports a weaker quarterly result, cites US tariff uncertainty delaying client projects

India's top software-services exporter Tata Consultancy Services has reported weaker-than-expected quarterly results, while warning uncertainty around U.S. tariffs that was prompting clients to rethink discretionary projects. The $283 billion Indian IT sector was counting on the Trump administration's business-friendly policies to revive client confidence and spending in its biggest market. 

The U.S. tariff saga has however ruined its expectations of its fortunes picking up.

TCS CEO K Krithivasan said that the company had spoken about improving market sentiments and early signs of discretionary spending revival in January. “This was not sustained due to many of the discussions around tariffs," the CEO said in a press conference. "We are observing delays in decision-making and project-starting with respect to discretionary investments."

Krithivasan said the uncertainty was likely to settle over the "next few months" and he expects fiscal 2026 to be better than the prior year. The comments came a day after Trump said he would temporarily lower the hefty duties imposed on dozens of countries while ramping up pressure on China.

TCS is the first major Indian IT firm to announce results for the fourth quarter. Smaller rivals Infosys, HCLTech, Wipro and Tech Mahindra will report in the coming weeks.

The Tata Group firm's net profit fell 1.69% to 122.24 billion rupees ($1.42 billion), while analysts on average expected 126.54 billion, per data compiled by LSEG. Revenue rose 5.3% to 644.79 billion rupees, missing analysts' estimates of 647.58 billion rupees.

Citing the uncertain business environment, TCS said it was yet to decide on annual wage hikes.