Tata Consultancy Services (TCS) trailed Street estimates for the quarter ended September 30 amid indications that its consumers had put a lid on spending.

The country’s largest IT services firm reported a consolidated net profit of ₹11,909 crore, a 5 per cent growth over ₹11,342 crore in the corresponding period of the previous year.

Analysts were expecting the company to report net profits in the region of ₹12,400 crore. However, revenues came in at ₹64,259 crore against ₹59,692 crore in the year-ago period which was in line with analyst projections. In US dollar terms, the revenues stood at $7.67 billion, a growth of 5.5 per cent over the previous year period.

The lower than expected net profits came on account of a decline in operating margins to 24.1 per cent, which were 60 basis points lower than 24.7 per cent in the preceding three months.

On a year-on-year basis, it marked a decline of 20 basis points.

The order book total contract value (TCV) during the period was at $8.6 billion, which was higher than $8.3 billion on a sequential basis.

“We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery.

“We also saw a strong performance in our growth markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders,” K. Krithivasan, chief executive officer and managing director, TCS, said while commenting on its performance during the period.

TCS said that in terms of growth by geographies, while North America showed a decline of 2.1 per cent over the previous year period, other markets showed a positive momentum.

While India showed the largest year-on-year growth at 95 per cent, the growth in UK stood at 4.6 per cent and that in Continental Europe at 1.8 per cent.

In verticals, while BFSI, consumer business, life sciences and healthcare witnessed a rise of 0.1 per cent each, the jump from clients in the manufacturing sector was at 5.3 per cent.

However, communication and media showed a drop of 10.3 per cent.

The total employee base at the end of the quarter stood at 612,724 against 606,998 in the preceding quarter.

“We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for 2025-26,” Milind Lakkad, chief HR officer, added.

At the board meeting on Thursday, the directors approved the second interim dividend of ₹10 per share. While the results came after market hours, the TCS share ended 0.56 per cent lower at ₹4,228.40 on the BSE.