TCS reported revenue of ₹73,188 crore for the quarter ended 30 September 2026, or $7,642 million in dollar terms, on its call of 8 October. In constant currency, revenue grew 0.5% sequentially and 2.8% year on year. Operating margin held at 24% and net margin was 19%. Total contract value (TCV) for the quarter was $9.6 billion, which management said excludes the Porsche and Best Buy deals.
Among segments, BFSI grew 2.5% sequentially in constant currency, manufacturing and technology and services each grew 3.1%, and India revenue grew 6%. Annualised AI revenue was put at $3.1 billion. The workforce stood at 598,056, and last-twelve-month attrition in IT services fell 30 basis points to 13.3%. Cash conversion was 102.2% of net income.
On outlook, the company repeated that it does not give specific revenue or earnings guidance. Chief executive K Krithivasan said management is confident growth momentum will continue but declined to comment on the next quarter. Chief financial officer Samir Seksaria said the long-term operating margin aspiration remains 26% to 28%, and flagged dilution of about 50 basis points linked to acquisitions, particularly MHP. Management also expects North America revenue to recover and said the usual seasonal furlough would be similar to earlier years.
Positives
- BFSI led growth among the large verticals. Management said: “BFSI was our strongest large vertical and the largest contributor to growth”
- AI is now a tenth of revenue. Management said: “Annualized AI revenue reached $3.1 billion and crossed 10% of our overall revenue.”
- AI work carries higher margins. Management said: “the $3.1 billion AI revenues which we have are coming in at a much higher margin than our company average”
- Deal flow stayed large. Management said: “TCV for the quarter was US$9.6 billion. This excludes the Porsche and Best Buy deals.”
Watch-points
- Discretionary spending is still being questioned by clients. Management said: “discretionary programs without near-term value remain under scrutiny.”
- Retail and consumer clients are exposed to costs and spending. Management said: “Retail and consumer products remain sensitive to inflation, energy costs, and selective consumer spending.”
- Margin expansion is described as difficult. Management said: “While it's an uphill task, we'll continue to endeavor to inch up on our margins.”
- A project deferral hit India revenue. Management said: “In India, we had a project deferral, which caused this revenue decrease.”
Source: Tata Consultancy Services Q2 FY27 earnings call transcript.
This is a summary of a company earnings call, published as general information. It is not investment advice or a recommendation to buy or sell any security. Read the full transcript before relying on any point.
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