TCS Reports 15% Profit Growth in Q2FY27, Revenue Hits ₹73,188 Crore

Tata Consultancy Services (TCS), India's leading IT services firm, announced its financial results for the second quarter of FY27, showcasing a net profit of ₹13,884 crore, which reflects a 14.9% increase from ₹12,075 crore in the same quarter last year. The company's revenue also saw a substantial rise, climbing 11.2% to ₹73,188 crore compared to ₹65,799 crore in Q2FY26. This performance comes amid ongoing global economic uncertainties and the impact of artificial intelligence on the industry.

Despite the challenges, TCS's results exceeded Bloomberg analyst expectations, which had projected revenue of ₹73,108 crore and a net profit of ₹13,786 crore. On a quarter-on-quarter basis, the net profit increased by 4%, while revenue grew by 1.3%. However, when adjusted for constant currency, revenue growth was modest at 0.5%, indicating that the company is navigating a cautious demand environment.

K Krithivasan, MD & CEO of TCS, emphasized the company's focus on leveraging advancements in AI to create measurable benefits for clients. He noted that while the demand landscape remains selective, TCS is well-positioned to assist clients in transforming their operations through AI-driven initiatives. The company’s AI revenue has surged to an annualized $3.1 billion, now constituting over 10% of its total revenue, up from $2.6 billion in the previous quarter.

The total contract value for Q2FY27 was reported at $9.6 billion, slightly up from $9.5 billion in Q1. TCS secured significant partnerships, including a five-year strategic alliance with Porsche AG and the acquisition of Best Buy’s global capability center, aimed at enhancing its AI capabilities. However, analysts expressed concerns over the company’s margins, which remained stable at 24%, as increased spending on external consultants and project costs have offset potential gains from favorable currency movements.

Looking ahead, TCS is expected to face a challenging second half of FY27, traditionally marked by lower working days. Analysts predict that the company may achieve a growth rate of around 1.5% to 2% for the full year, unless there is a significant improvement in demand. The firm has also ramped up hiring, onboarding 10,000 freshers in the latest quarter, as it prepares for anticipated demand in technology and AI sectors, while focusing on upskilling its workforce to meet future challenges.