Newsletter
TCS kicked off the IT earnings season with Q2 results in line with market expectations.
By the numbers:
- Net profit: up 4% QoQ to ₹13,884 cr vs ₹13,349 cr
- Revenue: up 1.3% QoQ to ₹73,188 cr vs ₹72,275 cr
- $ Revenue: up 0.2% QoQ to $7.64 billion from $7.62 billion
- EBIT Margin: at 24% vs 24% (QoQ)
Breaking it down: last quarter’s profit was pulled down by a one-time legal settlement cost. Without that cost, profit would have been ₹13,849 crore, almost the same as this quarter’s ₹13,884 crore.
TCS’ annualised AI revenue crossed $3 billion in the September quarter, up from $2.6 billion in the previous quarter.
Why margins stayed flat: margins usually improve in the September quarter as the initial impact of June-quarter salary hikes eases. This time, TCS invested part of those savings in AI and data centre capabilities, limiting the improvement.
Deal wins during the quarter stood at $9.6 billion, within analysts’ projected range of $9 billion to $10 billion.
TCS’ September-quarter revenue growth, measured at constant exchange rates, was led by manufacturing and technology & services, both up 3.1% QoQ, followed by banking, financial services and insurance at 2.5%.
The headcount numbers: TCS added 4,258 employees on a net basis in the September quarter, taking its total workforce to 598,056 at the end of Q2 FY27.
This was up from 593,798 at the end of June. The company had added 9,279 employees on a net basis in Q1 FY27, compared with 2,356 in the March quarter.
For shareholders: TCS also declared a second interim dividend of ₹12 per share for FY27. Eligible shareholders will receive ₹12 for every share they hold, or ₹1,200 before tax for 100 shares.
Stock action: it will be in focus today as the results came in post-market hours.
