Seven Numbers That Tell You How an IT Company Is Doing

Beyond Headline Noise: The Non-Specialist's Analytical Lens

This guide is for managers, entrepreneurs and readers who follow technology but are not analysts. It explains seven terms and shows how they appear in TCS's results for the September 2026 quarter, as reported by Business Standard on 8 October 2026. It is our framework and general information, not investment advice.

Every quarter, financial headlines trumpeting "double-digit profit surges" or "record deal bookings" flood business media. For corporate leaders who procure technology services, suppliers who sell to IT vendors, or professionals whose livelihoods depend on the sector, distinguishing between public relations framing and genuine business momentum is crucial. By tracking seven core operational indicators, any non-specialist can decode an IT company's actual performance.

The Seven Key Numbers That Reveal True Operational Performance

1. Reported revenue versus constant-currency revenue: Reported revenue is in rupees and includes the effect of exchange rates. Constant-currency revenue removes that effect to show the underlying change. TCS's rupee revenue grew 11.2% year on year, while constant-currency revenue grew 0.5% on the quarter. When these differ widely, the currency is doing most of the work.

2. Year-on-year versus quarter-on-quarter: Year-on-year compares with the same quarter last year and removes seasonality. Quarter-on-quarter compares with the previous quarter and shows momentum, but is affected by seasons. IT services are seasonal, with furloughs and fewer working days in some quarters. Look at both.

3. Total contract value: TCV is the value of deals signed in the period, over their whole life. TCS reported US$9.6 billion. It indicates demand but is not revenue; a deal may run for years and some deals can be cancelled or ramp slowly. Compare it with the figure in earlier periods, and with the revenue from operations.

4. Operating or EBIT margin: This is operating profit as a share of revenue. TCS reported 24%. Compare with peers and with the company's own history. Watch what drives changes: pricing, utilisation, wage increases, subcontractor costs or currency.

5. Utilisation and headcount: Utilisation is the share of billable time. Headcount changes show confidence about the future. TCS added 4,258 staff and reported 13.3% attrition. Attrition raises hiring and training costs and can hurt delivery.

6. Client concentration and vertical mix: Which sectors are growing? In TCS's quarter, BFSI grew 3.9% year on year, while consumer and energy fell slightly on the quarter. Heavy dependence on one sector or one region is a risk. The US grew only 1.5% year on year.

7. New-technology revenue: TCS reported annualised AI revenue of US$3.1 billion. Check how it is defined, whether it is incremental and how fast it grows. A figure without a definition is hard to compare.

“Always ask which growth rate you are being shown.”

An Eight-Point Practical Checklist for Quarterly Corporate Releases

A short checklist for any results release: 1. What is growth in constant currency, year on year and quarter on quarter? 2. How does it compare with estimates and guidance? 3. What happened to margin, and why? 4. What is the deal pipeline and how does it compare with last year? 5. What happened to headcount, attrition and fresher intake? 6. Which verticals and regions grew or shrank? 7. What did management say about the next quarter? 8. What are the one-off items? TCS had an exceptional Q1 charge, according to one report.

Currency Illusions: A Worked Conceptual Illustration

An invented illustration: Suppose an invented firm reports rupee revenue up 10%, while the rupee has weakened 8% against the dollar over the year. The underlying dollar growth is roughly 2%. If a rival reports 2% growth in dollars, the two are about even, though the first looks better in headlines. The numbers are invented to show the arithmetic.

Why this matters outside finance: If you buy services, a vendor's growth and margin tell you how much room it has to negotiate. If you are an employee, hiring numbers and attrition show how secure roles are. If you supply the industry, the pipeline indicates demand for facilities and services.

Methodological Limits, Long-Term Tracking Habits, and a Working Glossary

Limits of the method: Quarterly results are a snapshot. Companies manage numbers within accounting rules; read the notes and the commentary. Differences between outlets, like the year-on-year profit base noted in our first piece in this series, show that you should check the primary document.

A habit worth building: Keep a simple table with five key numbers per company per quarter. After a year, patterns appear that no single announcement shows.

A quick glossary: • Bookings: new contract value signed. • Run-rate: a recent period's figure scaled up to a year. • Utilisation: the share of staff time billed to clients. • Offshore-onsite mix: how much work is done in India versus at the client's location, which affects cost and margin. • Furlough: unpaid or reduced work time during a quiet period. Knowing these terms makes commentary easier to follow.

Where to find the primary documents: Listed companies publish results, investor presentations and exchange filings on their websites and on stock exchange portals. Reading the management commentary alongside the tables often explains what a number means.