TCS Q2 Net Profit

India’s IT bellwether Tata Consultancy Services (TCS) posted a strong performance for the second quarter ended September 30, registering a 15% year-on-year increase in consolidated net profit to Rs 13,884 crore. The bottom line grew from Rs 12,075 crore in Q2 of the previous fiscal year and Rs 13,349 crore in the preceding June quarter.

Consolidated revenue from operations climbed 11.22% year-on-year to Rs 73,188 crore, compared to Rs 65,799 crore in the corresponding period last year. On a sequential basis, revenue rose 1.3% from Rs 72,275 crore in Q1. The company maintained solid profitability metrics, delivering an operating margin of 24% and a net margin of 19%.

Key Financial & Operational Highlights

• AI Revenue Milestone: Annualized artificial intelligence revenue crossed the $3 billion mark to hit $3.1 billion, now making up over 10% of total revenue.
• Deal Momentum: Total Contract Value (TCV) for the quarter came in at $9.6 billion, up slightly from $9.5 billion in Q1.
• Sectoral Drivers: Sequential growth in constant currency terms was led by Manufacturing (3.1%), Technology and Services (3.1%), and BFSI (2.5%).
• Shareholder Payout: The board declared a second interim dividend of Rs 12 per equity share, setting October 14 as the record date and October 30 as the payment date.
• Headcount & Attrition: Net hiring rose by 4,258 employees, bringing total headcount to 5,98,056. The trailing 12-month IT services attrition stood at 13.3%.

Strategic Deals and Management Commentary

During Q2, TCS forged major enterprise partnerships to accelerate enterprise AI adoption:

• Entered a five-year strategic collaboration with Porsche AG, under which a TCS subsidiary plans to acquire a 100% stake in Porsche’s IT consultancy subsidiary, MHP Management- und IT-Beratung GmbH (pending regulatory approval).
• Reached an agreement to transition Best Buy’s Global Capability Centre in India to TCS to convert it into a specialized AI Capability Centre.

Commenting on the results, Chief Executive Officer and Managing Director K Krithivasan highlighted that the quarter reflected broad-based momentum across international markets and industry segments, underscoring that partnerships like Porsche and Best Buy showcase the shift toward large-scale AI transformation.

Ahead of the earnings announcement, shares of TCS settled 0.42% lower at Rs 2,075.25 on the BSE, outperforming the benchmark index which declined 1.44%.