TCS Q2 FY26 Earnings Results

Tata Consultancy Services is the flagship company and a part of Tata group. It is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions.

Q2 FY26 Earnings Results

• Net Profit: ₹12,075 crore, a rise of 1.4% year-on-year (YoY) from ₹11,909 crore in Q2 FY25, but declined 5.4% sequentially from Q1 FY26.

• Revenue: ₹65,799 crore, up 2.4% YoY from ₹64,259 crore and up 3.7% quarter-on-quarter (QoQ) from ₹63,437 crore in Q1 FY26.

• Operating Margin: Expanded 70 bps sequentially to 25.2%.

• EBIT: ₹16,565 crore, up from ₹15,514 crore sequentially; EBIT margin at 25.2%.

• Dividend: Interim dividend of ₹11 per share, record date October 15, payment date November.

• Restructuring Expenses: ₹1,135 crore declared, impacting over 12,000 employees.

• Deal Wins (TCV): $10 billion in Q2 FY26, compared to $9.4 billion previous quarter.

• Segment Highlights: Growth led by BFSI (banking, financial services, insurance) and Life Sciences, contributing over 47% of revenue.

• Geographies: US region contributed 48.8% of total revenue.

• Sequential Net Profit Decline: Down due to restructuring, though YoY profit increased.

• Cash Flow: Cash flow from operations at 110% of net income.

Management Commentary & Strategic Decisions

• CEO Statement (K Krithivasan): TCS is charting a course to become the world’s largest AI-led technology services company, focusing on bold transformation across talent, infrastructure, ecosystem partnerships, and customer value.

• AI Initiatives: Major investments announced in AI infrastructure, including plans to build a world-class AI datacentre business.

• New AI & Services Transformation Unit: Launched to scale efforts in integrating AI across service offerings.

• Talent & Restructuring: Restructuring drives include job cuts impacting about 12,000 employees this quarter, with greater emphasis on upskilling and redeployment for AI-centric roles.

• Deal Ramp-Ups: Expanded projects such as with BSNL and robust closure rates in next-gen verticals, contributing to deal wins.

• Operational Resilience: Focus remains on margin defense and project execution during macro-economic challenges.

• Customer Engagement: Short-cycle engagements leveraging AI, data, and cloud for speed, efficiency, and growth.

• Dividend Policy: Continued strong dividend payout, supportive of shareholder returns.

TCS Q1 FY26 Results

• Net Profit: ₹12,760 crore, up 6% YoY from ₹12,040 crore.

• Revenue: ₹63,437 crore, up 1.3% YoY from ₹62,613 crore.

• Operating Margin: 24.5%, improved by 30 basis points QoQ.

• Net Margin: 20.1%.

• Total Contract Value (TCV): $9.4 billion in Q1.

• Interim Dividend: ₹11 per share, paid August 4, record date July 16.

• Attrition: Last twelve months IT services attrition rate at 13.8%.

• Management Commentary: CEO K Krithivasan highlighted client caution due to global macroeconomic and geopolitical uncertainty, but strong deal closures and operational resilience were positive.