Mumbai, Apr 9 (PTI) The country's largest IT services company TCS on Thursday reported a 12.22 per cent jump in its March quarter net profit to Rs 13,718 crore, supported by expanded profit margins.

For fiscal year 2025-26, its profit after tax increased 1.35 per cent to Rs 49,210 crore compared to Rs 48,553 crore in FY25.

Its Chief Executive and Managing Director K Krithivasan said TCS is entering the new fiscal year with positive momentum on the back of new deal signings, and asserted that a bulk of the headwinds it had experienced in the recent past are mostly behind.

Addressing an analyst call, Krithivasan said the impact of the West Asia crisis will be limited to the challenges faced by clients in the travel and transportation segment and those based in the Gulf region.

From a headcount perspective, the company added 2,356 jobs in Q4 to take the overall number of employees to 5,84,519 as of March 31, 2026, marking the first quarter of net addition after two consecutive quarters of decline.

In FY26, the overall base declined by 23,460 people.

Krithivasan said the company's plan to lay off 2 per cent of its workforce, or about 12,000 people, has ended.

Meanwhile, Chief Financial Officer Samir Seksaria said the "restructuring" costs are limited to Rs 1,300 crore announced at the end of the December quarter.

TCS is the first company in the USD 315 billion Indian IT sector to report its earnings for the fiscal year 2025-26, which saw a deepening of artificial intelligence (AI) technologies and subsequent concerns on the employee intensity in the sector, which produces one of the best quality jobs in the economy.

In the reporting quarter, its revenue from operations jumped 9.64 per cent to Rs 70,698 crore from the Rs 64,479 crore in the year-ago period, while the same for the full fiscal jumped 4.58 per cent to Rs 2.67 lakh crore.

The operating profit margin expanded to a four-year high of 25.3 per cent in the March quarter, up from 24.2 per cent in the year-ago period.

Seksaria attributed the expansion to a variety of factors, including currency depreciation, and added that the 26 per cent aspiration will be achieved in a "longer term".

"While the macro-economic headwinds continue, we see sustained customer conviction in technology investments, which positions us well for the opportunities ahead," Krithivasan said.

It signed new deals of USD 12 billion in the three months to March, led by North America at USD 5.4 billion and the banking, financial services and insurance business at USD 2.8 billion.

On the AI front, the company disclosed that its revenue touched USD 2.3 billion on an annualised basis in Q4, which is over 6 per cent of its overall revenue.

The voluntary attrition stood at 13.7 per cent at the end of the quarter, and the company's Chief Human Resources Officer Sudeep Kunnumal said it will be reverting to implementing salary hikes across the organisation from April 1 onwards.

Krithivasan attributed the change to the clarity it has on deal momentum and demand, and added that the senior employees were in the 20 per cent of the staff left out in the last increment cycle, who will get their dues this year.

Seksaria said the top performers will get double-digit hikes, and the overall increments can impact margins by 1.50-2 per cent.

Its board has proposed a final dividend of Rs 31 per share, which takes the overall payout to Rs 110 per share.

The company scrip closed 1.09 per cent up at Rs 2,587.75 apiece on the BSE on Thursday against a 1.20 per cent correction on the benchmark. PTI AA BAL BAL

Profitability and revenue growth support stronger margins as headcount turns positive and workforce cuts end. Revenue, profitability, and operating margin expanded in the March quarter, with net profit rising and revenue from operations increasing on the back of wider margins and continued customer technology spending. The company also reported new deal signings and said AI-related revenue had scaled materially on an annualised basis, while macroeconomic headwinds were still present. Headcount turned positive after two quarters of decline, the workforce reduction plan had ended, restructuring costs were capped, and salary hikes would resume across the organisation.