IT · NSE: TCS
Tata Consultancy Services
Q2 FY27 earnings call · Guided by management
Call held 8 Oct 2026 · Read the filing on NSEFiling
- M.Cap
- ₹8,83,682Cr₹8.84L Cr
- P/E
- 17.1×
- 1Y return
- −22.01%
- From 52W high
- −27.1%
Highlights are read by AI from the company's filing and can contain mistakes. Check the source page linked to each line.
Share price
Results Q2 FY27, as filed · consolidated · ₹ Cr
| Q2 FY27 | Q2 FY26 | YoY | Q1 FY27 | QoQ | |
|---|---|---|---|---|---|
| Revenue | 73,188 | 65,799 | +11.2% | 72,275 | +1.3% |
| EBITDA | 18,815 | 17,978 | +4.7% | 18,556 | +1.4% |
| EBITDA margin | 25.7% | 27.3% | -161 bps | 25.7% | +4 bps |
| One-off items | — | -1,135 | — | -668 | — |
| PBTProfit before tax | 18,638 | 16,068 | +16.0% | 17,944 | +3.9% |
| Net profit | 13,884 | 12,075 | +15.0% | 13,349 | +4.0% |
| EPS (₹) | 38.37 | 33.37 | +15.0% | 36.90 | +4.0% |
From the company's own results filing on NSE. Net profit is the owners' share. Growth and the dotted lines are worked out from the filed figures.
Guidance
In short
- 01Q2 revenue was Rs 73,188 crore, up 0.5% sequentially and 2.8% year-on-year in constant currency.
- 02Operating margin held at 24%; net margin was 19%.
- 03Long-term margin aspiration kept at 26% to 28%, with near-term priority on investments for growth.
- 04MHP acquisition dilution is likely to hit margins by about 50 basis points in H2.
- 05TCV for the quarter was US$9.6 billion, excluding the Porsche and Best Buy deals.
- 06Annualized AI revenue reached $3.1 billion, over 10% of revenue, at a much higher margin than company average.
- 07India revenue fell due to a project deferral; management expects it back in the medium term.
- 08Management is confident growth momentum will continue on a medium-term basis.
Order book
Q2 TCV US$9.6 billion, excluding Porsche and Best Buy deals
K Krithivasan · Chief Executive Officer and Managing Director · p. 3
Q2 TCV US$9.6 billion, excluding Porsche and Best Buy deals
“TCV for the quarter was US$9.6 billion. This excludes the Porsche and Best Buy deals.”
Segments
International: International revenue up 1.2% QoQ in constant currency, led by UK at 3.5%
K Krithivasan · Chief Executive Officer and Managing Director · p. 3
International: International revenue up 1.2% QoQ in constant currency, led by UK at 3.5%
“International revenue grew 1.2% sequentially in constant currency. All international markets grew sequentially, led by the United Kingdom at 3.5%, followed by North America and Continental Europe at 0.4% each.”
India: India revenue grew 6% and Regional Markets 3.6% year-on-year
K Krithivasan · Chief Executive Officer and Managing Director · p. 3
India: India revenue grew 6% and Regional Markets 3.6% year-on-year
“India revenue grew 6%, and Regional Markets grew 3.6% year-on-year.”
AI: Annualized AI revenue reached $3.1 billion, over 10% of total revenue
K Krithivasan · Chief Executive Officer and Managing Director · p. 4
AI: Annualized AI revenue reached $3.1 billion, over 10% of total revenue
“Annualized AI revenue reached $3.1 billion and crossed 10% of our overall revenue.”
BFSI: BFSI grew 2.5% QoQ and 3.9% YoY in constant currency, largest growth contributor
K Krithivasan · Chief Executive Officer and Managing Director · p. 10
BFSI: BFSI grew 2.5% QoQ and 3.9% YoY in constant currency, largest growth contributor
“BFSI was our strongest large vertical and the largest contributor to growth, with 2.5% sequential and 3.9% year-on-year growth in constant currency.”
Manufacturing: Manufacturing grew 3.1% QoQ and 4.2% YoY
K Krithivasan · Chief Executive Officer and Managing Director · p. 10
Manufacturing: Manufacturing grew 3.1% QoQ and 4.2% YoY
“Manufacturing grew 3.1% sequentially and 4.2% year-on-year.”
Demand
Demand not materially changed; discretionary programs remain under scrutiny
K Krithivasan · Chief Executive Officer and Managing Director · p. 4
Demand not materially changed; discretionary programs remain under scrutiny
“The demand environment has not materially changed since last quarter, and discretionary programs without near-term value remain under scrutiny.”
International: No comment on next quarter; confident growth momentum continues medium term
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 12
International: No comment on next quarter; confident growth momentum continues medium term
“but on a medium-term basis, looking at the TCV, looking at the pipeline and the client conversations that we are having, we're confident that growth momentum will continue.”
Q3 furlough expected similar to previous years
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 17
Q3 furlough expected similar to previous years
“And in Q3, so far from what we are seeing, the furlough will be very similar to the previous years. We don't see any major change.”
AI: Strong success in agent control plane work this quarter
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 18
AI: Strong success in agent control plane work this quarter
“Particularly this quarter, we've seen strong success in the agent control plane.”
Bench built for new-age skills, deployed with a lag
Samir Seksaria · Chief Financial Officer · Q&A · p. 23
Bench built for new-age skills, deployed with a lag
“I think if you look at some of the new-age skills which we are hiring, first, we need to get them, and then the deployment happens with a lag.”
Margins and costs
Operating margin stable sequentially at 24%
Samir Seksaria · Chief Financial Officer · p. 5
Operating margin stable sequentially at 24%
“Our operating margins remained stable sequentially at 24%.”
Higher bench and subcontractor hiring; partly offset by currency gains and operating leverage
Samir Seksaria · Chief Financial Officer · p. 5
Higher bench and subcontractor hiring; partly offset by currency gains and operating leverage
“As we build future capacity and navigate demand transitions, we have invested in a higher bench and increased hiring of subcontractors to meet near-term skills and delivery requirements. This quarter, we were able to mitigate these headwinds partly by currency gains and operating leverage.”
Net margin 19%; DSO 74 days, flat sequentially
Samir Seksaria · Chief Financial Officer · p. 6
Net margin 19%; DSO 74 days, flat sequentially
“Our net margins for the quarter were 19%. DSO stood at 74 days, constant sequentially in dollar terms.”
Subcon rise is for skill mismatches; partly linked to visa fee hike
Samir Seksaria · Chief Financial Officer · Q&A · p. 13
Subcon rise is for skill mismatches; partly linked to visa fee hike
“The overall increase in subcon has been across India as well as overseas. It is more to meet near-term demand-supply skill mismatches. Some part of it could be linked to visa fee hike also, but not completely.”
Subcon expenses named as a margin lever
Samir Seksaria · Chief Financial Officer · Q&A · p. 15
Subcon expenses named as a margin lever
“subcon expenses, given the rate at which it has increased, definitely is one of the levers.”
Debt and working capital
Cash conversion 102.2% of net income; funds invested $5.98 billion
Samir Seksaria · Chief Financial Officer · p. 6
Cash conversion 102.2% of net income; funds invested $5.98 billion
“Our cash conversion remains strong at 102.2% of net income and funds invested at the end of the period stood at $5.98 billion.”
Acquisitions and new business
Proposed acquisition of MHP with Porsche partnership, subject to regulatory approvals
K Krithivasan · Chief Executive Officer and Managing Director · p. 4
Proposed acquisition of MHP with Porsche partnership, subject to regulatory approvals
“Our partnership with Porsche and the proposed acquisition of MHP, which is subject to regulatory approvals, strengthen our position in AI powered mobility and engineering.”
Launched Physical AI labs in Bengaluru with NVIDIA and in Pune
K Krithivasan · Chief Executive Officer and Managing Director · p. 4
Launched Physical AI labs in Bengaluru with NVIDIA and in Pune
“new Physical AI capabilities, including Autonomous Engineering Lab powered by NVIDIA in Bengaluru and an AI-first lights-out factory lab in Pune.”
With MHP, TCS to set up an AI Centre of Excellence for mobility
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 24
With MHP, TCS to set up an AI Centre of Excellence for mobility
“And what we will be doing with MHP is working with them and establishing an AI Centre of Excellence for mobility”
Investment focus includes targeted capability acquisitions
Samir Seksaria · Chief Financial Officer · p. 5
Investment focus includes targeted capability acquisitions
“First, we continue to strengthen our portfolio through targeted capability acquisitions.”
Salesforce: Coastal Cloud and ListEngage combined with own Salesforce practice
Aarthi Subramanian · Executive Director · p. 9
Salesforce: Coastal Cloud and ListEngage combined with own Salesforce practice
“By combining the strengths of Coastal Cloud, ListEngage, and our own Salesforce practice, we are driving significant growth.”
Dividends and buybacks
Capital allocation policy unchanged; committed to returning substantial free cash flows
Samir Seksaria · Chief Financial Officer · p. 6
Capital allocation policy unchanged; committed to returning substantial free cash flows
“Our capital allocation policy remains unchanged, and we remain committed to returning substantial free cash flows to our shareholders while judiciously investing to support our long-term growth aspirations.”
Risks
India: India revenue decrease caused by a project deferral
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 13
India: India revenue decrease caused by a project deferral
“In India, we had a project deferral, which caused this revenue decrease.”
Furlough seasonality and ecosystem investments named as H2 headwinds
Samir Seksaria · Chief Financial Officer · Q&A · p. 16
Furlough seasonality and ecosystem investments named as H2 headwinds
“The normal furlough seasonality and our continued ecosystem investments would be our headwinds.”
India: Deferred India revenue expected back in the medium term; no date given
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 28
India: Deferred India revenue expected back in the medium term; no date given
“And we expect it'll come back because there was a deferral, but we are very confident it will be back in the medium term.”
India: India deferral not related to third-party or hardware pass-through
K Krithivasan · Chief Executive Officer and Managing Director · Q&A · p. 28
India: India deferral not related to third-party or hardware pass-through
“And what we talked about in India, it's not related to any third-party or hardware pass-through.”
Other
Q2 revenue Rs 73,188 crore, up 0.5% QoQ and 2.8% YoY in constant currency
K Krithivasan · Chief Executive Officer and Managing Director · p. 3
Q2 revenue Rs 73,188 crore, up 0.5% QoQ and 2.8% YoY in constant currency
“Revenue for the quarter was ₹73,188 crore. In constant currency, revenue grew 0.5% sequentially and 2.8% year-on-year.”
Rupee revenue up 1.3% QoQ and 11.2% YoY; dollar revenue $7,642 million
Samir Seksaria · Chief Financial Officer · p. 4
Rupee revenue up 1.3% QoQ and 11.2% YoY; dollar revenue $7,642 million
“Our quarterly revenue was ₹73,188 crore, a growth of 1.3% sequentially and 11.2% on a year-on-year basis. In dollar terms, revenue was $7,642 million, a growth of 20 basis points sequentially and 2.4% year-on-year.”
Expanding into adjacencies such as data center services
Samir Seksaria · Chief Financial Officer · p. 6
Expanding into adjacencies such as data center services
“we are creating new growth engines for the future. We are expanding into adjacencies, such as data center services,”
Workforce at 598,056 associates
Sudeep Kunnumal · Chief HR Officer · p. 9
Workforce at 598,056 associates
“This quarter, we continue to invest in future-ready talent, onboarding top talent globally, taking our workforce to 598,056 associates.”
IT services: LTM IT services attrition down 30 basis points to 13.3%
Sudeep Kunnumal · Chief HR Officer · p. 10
IT services: LTM IT services attrition down 30 basis points to 13.3%
“LTM attrition in IT services reduced by 30 basis points sequentially to 13.3%.”
Sources
- Earnings call transcript, Q2 FY27 Filed 14 Oct 2026 · 29 pages
Management's own statements, quoted from its NSE filings. This page was read by AI and can contain mistakes: check the source pages before relying on any figure. No forecast or opinion of ours. Not investment advice.