Explore the latest financials, strategies, and what the future holds for these IT powerhouses

Tata Consultancy Services (TCS) and Infosys remain two of the most influential and closely watched entities. As the broader global economy undergoes a cautious recovery marked by macroeconomic headwinds, geopolitical tensions, and tight discretionary spending by clients, both companies have taken strategic positions to weather the downturn and stimulate growth. A closer analysis of their Q4 FY25 performance, deal wins, operational strategies, and market sentiment provides valuable insight into which IT giant is better positioned to lead the industry’s recovery. 

Financial Performance: Q4 FY25 Snapshot 

In the fourth quarter of FY25, TCS reported consolidated revenues of ₹64,479 crore, reflecting a modest year-on-year (YoY) growth of 5.29%. However, the net profit for the quarter dipped by 1.69% YoY to ₹12,224 crore. This slight decline in profitability was primarily attributed to continued softness in discretionary spending, particularly in key markets like the United States and Europe. Additionally, client-initiated project deferrals and budget reallocation towards essential technology operations impacted bottom-line performance. 

Infosys, on the other hand, posted a quarterly revenue of ₹40,925 crore, achieving a YoY growth of 7.92%. Despite the healthier top-line growth relative to TCS, Infosys experienced a sharper decline in net profit, which fell by 11.75% YoY to ₹7,033 crore. The decline was driven largely by lower third-party revenue and a significant reduction in high-margin digital transformation deals. The overall demand environment remained cautious, with clients adopting a “wait-and-watch” approach amid concerns over inflation, interest rates, and tech spending. 

Deal Wins and Market Momentum 

One of the key indicators of future revenue visibility for IT companies is the total value of large deal wins. In Q4 FY25, TCS emerged as a clear frontrunner in this domain, securing deals worth $12.2 billion. This brought its full-year total to $39.4 billion, indicating a strong and consistent flow of large, long-term contracts. The deal pipeline included multi-year engagements in cloud transformation, infrastructure modernization, and enterprise resource planning, spread across BFSI, retail, and manufacturing verticals. 

Infosys, by comparison, announced $2.6 billion in large deal wins for the same quarter, totaling $11.6 billion for the entire fiscal year. While still substantial, the number is significantly lower than TCS’s, suggesting a relatively cautious approach by Infosys or possibly stiffer competition in large-scale enterprise engagements. The company focused on mid-sized contracts and renewal business, which offered margin stability but limited scope for exponential top-line growth. 

Operational Efficiency and Workforce Trends 

Operational metrics offer another dimension to evaluate the readiness of IT majors in managing volatility. TCS reported an attrition rate of 13.3% in Q4 FY25, down from its peak levels earlier in the fiscal year, reflecting a stabilizing trend in employee retention. The company’s total headcount stood at 607,979, making it the largest IT employer in India. Its ongoing efforts to re-skill employees and reduce lateral hiring costs have improved employee productivity and margin resilience. 

Infosys reported a slightly higher attrition rate of 14.1% during the quarter, with a total workforce of around 324,000. While attrition levels have moderated compared to the previous year, Infosys has been more cautious in its hiring plans. The company has focused on optimizing pyramid structures, reducing subcontractor dependency, and increasing the share of freshers in its workforce to manage costs. 

Both companies exercised hiring discipline throughout FY25, a trend reflective of the cautious sentiment pervading the IT sector. The need for optimizing utilization rates and reducing bench strength has prompted a leaner operational model across the board. 

Forward-Looking Guidance and Strategic Positioning 

Outlook statements and guidance provide a glimpse into how companies view the road ahead. Infosys offered a revenue growth guidance of 0–3% for FY26, reflecting subdued expectations amidst continuing client hesitancy and extended sales cycles. The management has indicated that the first half of the fiscal year may remain sluggish, with gradual improvement anticipated in the latter half driven by spending on cost optimization, AI integration, and cloud-native platforms. 

TCS, in contrast, refrained from issuing specific numerical guidance but maintained a strong emphasis on resilience and margin protection. The leadership reiterated its commitment to achieving double-digit margins and leveraging its broad portfolio of offerings to capture long-term enterprise transformation mandates. With a solid order book and diversified client base, TCS appears better insulated from sector-specific turbulence. 

Stock Market Sentiment and Performance 

Market confidence in both companies has seen fluctuations in recent months. As of early May 2025, TCS shares were trading at approximately ₹3,403.70, reflecting a year-to-date decline of around 13%. The drop came amid broader market corrections and pressure on IT valuations following weaker-than-expected Q4 results. 

Infosys shares were trading near ₹1,505.60, down by over 21% in the last three months. The steeper fall in Infosys stock can be attributed to the sharper decline in profit, tepid guidance for FY26, and a perception of relatively weaker deal momentum compared to its larger peer. Analysts have raised concerns about Infosys’s ability to quickly adapt to the changing deal landscape and its slower-than-expected ramp-up of large engagements. 

Institutional sentiment currently favors TCS, largely due to its stronger deal pipeline, more diversified exposure, and relatively stable margins. 

Strategic Priorities and Technological Focus 

TCS continues to place strategic emphasis on scaling its cloud and AI capabilities through platforms like TCS Cognix and its partnerships with hyperscalers such as AWS, Microsoft Azure, and Google Cloud. The company is also investing in proprietary AI solutions to improve automation in IT operations, application development, and customer service delivery. 

Infosys has launched new generative AI initiatives under its “Infosys Topaz” framework and has been expanding its AI-based services through co-innovation labs and client pilot programs. While the initiatives show promise, the pace of scaling these offerings across large accounts remains a challenge. Infosys is also focused on strengthening its presence in energy, healthcare, and manufacturing verticals, where client budgets have shown relative resilience. 

Both firms have acknowledged that artificial intelligence, cybersecurity, and enterprise cloud migration will drive the next wave of growth. However, execution agility, client trust, and ability to deliver at scale will differentiate leaders from followers. 

As India’s two largest IT exporters navigate a challenging global environment, Tata Consultancy Services appears better positioned to lead the market recovery. Its superior deal wins, stable operational metrics, and disciplined financial management provide a strong foundation. While Infosys has demonstrated strategic clarity and invested heavily in next-generation technologies, its conservative guidance, sharper decline in profits, and weaker deal momentum position it as a more defensive player in the current cycle. 

The upcoming quarters will serve as a crucial litmus test for both companies. A sustained recovery in enterprise tech spending, coupled with effective execution of digital transformation initiatives, will determine the trajectory of India’s IT sector. TCS’s current standing suggests it is better placed to capitalize on the opportunities ahead and potentially lead the resurgence of the industry.