Tata Consultancy Services Earnings Summary — Q2 FY2027
TCS Reports Strong Sequential Growth and Declares Second Interim Dividend Amidst AI Expansion
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue has increased for 6 consecutive quarters.
- Revenue of ₹73,188 Cr is 11.2% higher year-on-year.
- Revenue has compounded at 7.2% annualised over the last 10 quarters.
- Revenue is at its highest level in 10 quarters.
- Net profit has reached its highest level in 10 quarters.
- Net profit of ₹13,884 Cr is 15.0% above the same quarter last year.
- Profit growth is outpacing revenue growth, pointing to positive operating leverage.
- Net profit has compounded at 6.5% annualised across the period.
- Operating margin stands at 25.7% in Q2 FY2027.
- Operating margin compressed by 161 bps year-on-year.
- Over the last two years operating margin has contracted by 33 bps.
- PBT margin is 25.5%.
- Expenses grew 13.7% against revenue growth of 11.2%.
- Operating profit of ₹18,815 Cr is 4.7% higher year-on-year.
- Operating leverage has been under pressure recently.
- 6 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 70/100 (Strong) on the latest 10 quarters.
- Business momentum remains positive heading into the next quarter.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q2 FY2027 | Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Stable | 73,188 | 72,275 | 70,698 | 67,087 | 65,799 | 63,437 | 64,479 | 63,973 | 64,259 | 62,613 |
| Expenses | Stable | 54,373 | 53,719 | 51,422 | 48,818 | 47,821 | 46,562 | 47,499 | 46,939 | 47,528 | 45,951 |
| Operating Profit | Stable | 18,815 | 18,556 | 19,276 | 18,269 | 17,978 | 16,875 | 16,980 | 17,034 | 16,731 | 16,662 |
| Operating Margin | Stable | 25.7% | 25.7% | 27.3% | 27.2% | 27.3% | 26.6% | 26.3% | 26.6% | 26.0% | 26.6% |
| Other Income | Volatile | 1,337 | 900 | 757 | -2,273 | -268 | 1,660 | 1,028 | 1,243 | 729 | 962 |
| Interest | Volatile | 252 | 273 | 265 | 538 | 229 | 195 | 227 | 234 | 162 | 173 |
| Depreciation | Stable | 1,262 | 1,239 | 1,406 | 1,380 | 1,413 | 1,361 | 1,379 | 1,377 | 1,266 | 1,220 |
| Profit Before Tax | Accelerating | 18,638 | 17,944 | 18,362 | 14,078 | 16,068 | 16,979 | 16,402 | 16,666 | 16,032 | 16,231 |
| Tax | Accelerating | 4,704 | 4,524 | 4,578 | 3,358 | 3,937 | 4,160 | 4,109 | 4,222 | 4,077 | 4,126 |
| Net Profit | Stable | 13,884 | 13,349 | 13,718 | 10,657 | 12,075 | 12,760 | 12,224 | 12,380 | 11,909 | 12,040 |
| Net Margin | Stable | 19.0% | 18.5% | 19.4% | 15.9% | 18.4% | 20.1% | 19.0% | 19.4% | 18.5% | 19.2% |
Key Takeaways
- Revenue grew 11.2% YoY to ₹73,188 crore, maintaining positive momentum across major markets and industry segments.
- Net profit attributable to shareholders reached ₹13,884 crore, representing a 15.0% increase over the same quarter last year.
- The Board declared a second interim dividend of ₹12 per equity share, payable on October 30, 2026.
- Operating margin improved to 23.6%, up 98 basis points sequentially, driven by operational rigor and value-led delivery.
- The company signed a definitive agreement to acquire MHP Management- und IT-Beratung GmbH for approximately ₹3,484 crore to bolster automotive and industrial consulting capabilities.
- BFSI remains the largest segment contributing ₹28,882 crore to revenue, showing steady growth despite macroeconomic volatility.
Management Guidance
TCS is shifting focus from AI experimentation to scaled deployment, aiming to become the world's largest AI-led tech services company. Management expects demand to converge around large AI workloads, specifically in the 100-200 MW range per customer via their HyperVault business.
Sentiment Shift
Improving
Sequential growth for the third consecutive quarter and broad-based client additions suggest stability and returning growth in mid-to-large accounts.
Outlook
TCS maintains a robust order book with $12 billion in TCV for the latest period. The company is actively investing in the 'Build-Partner-Acquire' strategy, specifically targeting AI infrastructure through HyperVault and high-density capacity partnerships with OpenAI and AMD.
From the Annual Report (Key Quotes)
“Our annualized AI revenues surpassed $2.3 billion, driven by the accelerated deployment of AI solutions across industries.”
“Clients are looking for partners who can bring deep technology excellence... and take end-to-end accountability with confidence on outcomes and ROI.”
“HyperVault is forming the foundation of TCS’s full spectrum play from infrastructure to intelligence.”
Official Quarterly Documents
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This summary is AI-generated from Tata Consultancy Services's latest quarterly filing and earnings call. For informational purposes only — not investment advice.
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