India’s largest IT services firm, Tata Consultancy Services (TCS), has reported strong profits for Q1 FY26, yet the company remains undecided on salary hikes for employees. The announcement was made by Milind Lakkad, Executive VP and Chief Human Resources Officer, during the Q1 earnings press conference on July 10, 2025.
TCS Sees Strong Growth, But No Pay Decision Yet
For the April–June quarter of FY26, TCS posted a 6% year-on-year rise in consolidated net profit at ₹12,760 crore, up from ₹12,040 crore in Q1 last year. Revenue also saw a modest 1.3% increase, reaching ₹63,437 crore. Despite this financial stability, Lakkad confirmed that no decision has been made yet regarding wage hikes.
Earlier this year, TCS had indicated that any salary revisions would depend on how the business shapes up amid global uncertainties. The company had previously delayed hikes due to a “challenging environment” at the end of FY25.
Attrition Hits Two-Year High
While profits are up, employee retention remains a growing concern. TCS reported an attrition rate of 13.8% on a last twelve-month basis, the highest in two years. This marks an increase from the 13.3% attrition rate reported in Q4 FY25. Lakkad admitted that the current attrition rate is above the company’s comfort level of 13% and efforts are being made to bring it down.
Despite the attrition, TCS hired over 5,000 new employees during the quarter, taking its total workforce to 613,069, up from 607,979 last quarter.
Indian IT Sector Outlook Remains Positive
TCS’s performance comes amid continued growth in the Indian IT sector. The industry has been expanding globally, with a strong focus on digital services and cloud technology. According to IBEF, the IT industry reached $227 billion in FY22 and is expected to hit $380 billion in GDP contribution by 2026. Meanwhile, 14 million new tech jobs are projected to be created by then.
Yet, for employees at TCS, the wait for a salary revision continues—despite rising profits, increased headcount, and a growing technology market.
