Tata Consultancy Services LimitedInformation TechnologyTCS
Q2 FY27 concall · earnings callTata Consultancy Services Limited
TCS reported Q2 FY27 revenue of ₹73,188 crore with 0.5% sequential constant-currency growth, 24% operating margin, US$9.6 billion TCV and annualized AI revenue of $3.1 billion amid selective demand.
Numbers
| Metric | This quarter | Change | Five-quarter trend |
|---|---|---|---|
| Revenue | ₹73,188 Cr | +1.3% sequentially and 11.2% on a YoY basis | |
| Constant currency revenue growth | 0.5% sequentially and 2.8% year-on-year | — | |
| Operating margin | 24% | stable sequentially | |
| TCV | US$9.6 billion | — | |
| Annualized AI revenue | $3.1 billion | — |
Financials
From filed quarterly results. YoY and QoQ compare each metric on the same accounting basis.
| Quarter | Revenue | Net profit (PAT) | Basic EPS |
|---|---|---|---|
| Q3 FY25 | ₹63,973.00 Cr+5.6% YoY-0.4% QoQ | ₹12,444.00 Cr+12.1% YoY+4.1% QoQ | ₹34.21+12.9% YoY+3.9% QoQ |
| Q2 FY25 | ₹64,259.00 Cr+7.7% YoY+2.6% QoQ | ₹11,955.00 Cr+5.1% YoY-1.2% QoQ | ₹32.92+6.2% YoY-1.1% QoQ |
| Q1 FY25 | ₹62,613.00 Cr+5.4% YoY+2.2% QoQ | ₹12,105.00 Cr+8.9% YoY-3.2% QoQ | ₹33.28+10% YoY-3.2% QoQ |
| Q4 FY24 | ₹61,237.00 Cr+3.5% YoY+1.1% QoQ | ₹12,502.00 Cr+9.3% YoY+12.7% QoQ | ₹34.37+10.4% YoY+13.5% QoQ |
| Q3 FY24 | ₹60,583.00 Cr+4% YoY+1.5% QoQ | ₹11,097.00 Cr+2% YoY-2.5% QoQ | ₹30.29+2.2% YoY-2.3% QoQ |
TL;DR
- Revenue was ₹73,188 crore with 0.5% sequential and 2.8% year-on-year growth in constant currency; international revenue grew 1.2% sequentially
- Growth broadened with BFSI up 2.5% sequentially and Manufacturing and Technology and Services each up 3.1%; United Kingdom led markets at 3.5%
- TCV was US$9.6 billion excluding Porsche and Best Buy deals; win rates improved
- Annualized AI revenue reached $3.1 billion and crossed 10% of overall revenue
- Operating margin was 24% stable sequentially and net margin was 19% while prioritizing investments in partnerships, talent, subcontractors and capacity
Said on the call
“The demand environment has not materially changed since last quarter, and discretionary programs without near-term value remain under scrutiny.”
From the Q&A
| Topic | What management said |
|---|---|
| Growth momentum | Management said they are confident growth momentum will continue on a medium-term basis based on TCV, pipeline and client conversations, without commenting on the immediate next quarter. |
| AI deflation in BFSI and Technology | Management said productivity-led deflation exists but is being offset by AI-led modernization, vendor consolidation and fast AI revenue growth in BFSI; did not conclude deflation is complete. |
| India decline and client metrics | Management attributed India revenue decline to a project deferral with no structural issue and expected delivery in subsequent quarters; drop in 100 million client band attributed to currency movement. |
| Margin path | Management reiterated long-term aspiration of 26% to 28% margins; cited subcontractor costs, productivity, utilization and tapering of Q2 headwinds as levers while near-term focus remains on investments. |
| Pricing | Management said pricing is broadly stable with better pricing on AI revenues and only a slight reduction in revenue per employee; some front-loading of productivity benefits occurs. |
| Geography and weak verticals | Management expects North America revenue to recover, Consumer Business to improve with Q3 seasonally important, and Energy, Resources, and Utilities to recover structurally in the medium term. |
Guidance
- No specific revenue or earnings guidance provided
- Continue to prioritize investments for growth while working to inch margins higher from 24%
- MHP acquisition-related dilution likely to impact by about 50 basis points depending on timing of closure
- Expect furlough seasonality in Q3 similar to previous years
- BSNL can provide a cushion for the next couple of quarters; regional markets to remain volatile
Source
Summary written from the transcript filed by Tata Consultancy Services Limited for the call held on 14 Oct 2026; published 14 Oct 2026, 17:06 IST.
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