#TCS #TCSResults #Q2Earnings #ITServices #IndianIT #StockMarket #Sensex #Nifty #AI #DigitalTransformation #TCSQ2FY26
MUMBAI: India’s IT bellwether, Tata Consultancy Services (TCS), kicked off the earnings season for the technology sector on Thursday, announcing its financial results for the second quarter of the fiscal year 2025-26 (Q2 FY26). The company delivered a slightly better-than-expected revenue performance in a challenging global market, while its net profit saw a modest annual rise.
TCS reported a consolidated net profit of ₹12,075 crore for the quarter ended September 30, 2025. This figure represents an increase of approximately 1.4% compared to the ₹11,909 crore posted in the corresponding period last year. While the year-on-year growth was tepid, the profit figure managed to beat some analyst estimates, reflecting disciplined execution amidst a global slowdown in discretionary spending.
Revenue and Operating Highlights
The company’s revenue from operations stood at ₹65,799 crore, marking a 2.4% rise year-on-year (YoY). Sequentially, the revenue grew 3.7% from the preceding quarter, translating to a growth of 0.8% in Constant Currency (CC) terms. This constant currency growth is the key metric watched by the market, indicating the underlying demand excluding currency fluctuations.
A key highlight of the quarter was the significant boost in operational efficiency:
- Operating Margin (EBIT Margin): The EBIT margin expanded by 70 basis points (bps) sequentially, rising to 25.2%. This expansion signals the company’s success in cost management and utilization despite facing headwinds from annual wage hikes and high investments.
- Total Contract Value (TCV): In a strong sign of sustained demand for essential digital transformation services, TCS reported a robust Total Contract Value (TCV) of $10 billion in new order bookings. This is a noticeable improvement from the $9.4 billion TCV recorded in the previous quarter, providing a solid revenue visibility pipeline for the coming quarters.
Focus on AI-Led Transformation
TCS management emphasized the company’s aggressive focus on the future technology landscape, particularly in Artificial Intelligence (AI).
CEO K Krithivasan, commented on the performance, stating, “Our journey is anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value. The investments, including the building of a world-class AI infrastructure business, demonstrate our commitment to this transformation.”
The company also highlighted the creation of a new business entity dedicated to building world-class AI infrastructure, including plans for a 1 GW capacity AI datacenter in India. This strategic pivot signals a strong intent to capture the next wave of IT spending focused on GenAI and large-scale data transformation.
Segment and Market Performance
Growth was broad-based across business segments, though North America remained soft:
- Vertical Growth (QoQ CC): The Life Sciences and Healthcare segment led the charge with a 3.4% sequential CC growth. The largest vertical, Banking, Financial Services, and Insurance (BFSI), showed continued momentum with a 1.1% CC growth. Manufacturing and Communication, Media, and Technology also delivered positive growth.
- Geographic Performance (QoQ CC): Growth was moderate across major geographies. North America grew by 0.8%, and Europe grew by 1.4%, while the UK declined sequentially. The domestic market (India) showed healthy growth at 4%.
Interim Dividend Declared
The Board of Directors also rewarded shareholders by declaring a second interim dividend of ₹11 per equity share. The record date for this dividend has been set as October 15, 2025, with payment scheduled for November 4, 2025.
In summary, TCS delivered a resilient performance in Q2, with steady growth in constant currency terms and a clear focus on margin expansion and securing large deal wins. The management’s commentary underscored strategic investments in AI, positioning the company to navigate current economic caution and capitalize on future technology shifts.
TCS Q2 FY26 Snapshot
#TCS #TCSResults #Q2Earnings #ITServices #IndianIT #StockMarket #Sensex #Nifty #AI #DigitalTransformation #TCSQ2FY26
