TCS Reports 4% Net Profit Growth to ₹13,884 Crore in Q2 FY27

Tata Consultancy Services (TCS), the leading IT services firm in India, has reported a 4% sequential increase in its consolidated net profit, reaching ₹13,884 crore for the second quarter of FY27. This figure is up from ₹13,349 crore in the previous quarter, and it surpasses the market expectations set by a CNBC-TV18 poll, which estimated a profit of ₹13,673 crore. Notably, the profit also reflects a slight increase from ₹13,849 crore when excluding an exceptional loss from a legal settlement in the first quarter.

In terms of revenue, TCS recorded a consolidated operational income of ₹73,188 crore, marking a 1.3% rise from ₹72,275 crore in the prior quarter. This aligns closely with the poll estimate of ₹73,225 crore and represents an 11.2% increase year-on-year. The company's operating profit stood at ₹17,553 crore, up 1.4% from the previous quarter, with an operating margin maintained at 24% and a net profit margin of 19%.

The company has declared a dividend of ₹12 per share, with the record date set for October 14, 2026, and payment scheduled for October 30, 2026. TCS has also reported an impressive annualized AI revenue of $3.1 billion for the July-September quarter, which now constitutes over 10% of its total revenue. The total contract value (TCV) for the quarter reached $9.6 billion, reflecting strong demand for AI-driven transformation services.

Aarthi Subramanian, TCS Executive Director and COO, emphasized the robust momentum in AI, noting that the demand for AI-native solutions and cybersecurity services continues to grow. CEO K Krithivasan highlighted broad-based growth across international markets and various industry sectors, along with strategic partnerships with companies like Porsche and Best Buy aimed at enhancing AI capabilities.

Looking ahead, TCS reported a 0.5% sequential revenue growth in constant currency terms, with international revenue increasing by 1.2%. The banking, financial services, and insurance (BFSI) sector saw a 2.5% growth, while manufacturing and technology services grew by 3.1%. However, revenue from India declined by 10.3% sequentially. As of September, TCS's workforce totaled 598,056 employees, with a stable attrition rate of 13.3%. The company generated net cash from operations amounting to ₹14,190 crore, which is 102.2% of its net income. TCS shares closed down 0.21% at ₹2,076 ahead of the earnings announcement, reflecting a 35.7% decline in 2026 so far, compared to a 15% drop in the Nifty 50 index.