TCS reported modest revenue growth in the second quarter of FY27. The company’s annualised AI revenue crossed $3.1 billion, representing more than 10% of its total revenue. It rose 0.5% sequentially in constant currency to $7.64 billion, while operating margin stood at 24%. Net profit was $1.45 billion, with a net margin of 19%.
TCS said demand is increasingly centred on AI-native solutions, AI-led transformation of enterprise systems and autonomous global business services.
“AI momentum continues to be strong,” Aarthi Subramanian, Chief Operating Officer at TCS, said during the earnings call. She said clients were looking to invest productivity gains from AI into wider enterprise transformation.
The Indian tech giant also said AI revenue is seeing better pricing and that some AI businesses have higher margins than the company average, although it did not disclose a specific margin figure.
The company said it is focusing on measurable enterprise outcomes from AI. In one customer deployment, TCS said a global industrial manufacturer reduced lead-to-quote time from 4.7 days to less than an hour within a quarter.
TCS Chief Executive Officer K Krithivasan said discretionary programmes without near-term value remained under scrutiny. “Our primary opportunity and focus are on translating the advances in AI into measurable enterprise advantage for our clients,” he said.
The company reported $9.6 billion in total contract value during the quarter, excluding the proposed Porsche and Best Buy engagements. It announced a five-year strategic partnership with Porsche and plans to acquire MHP, Porsche’s Germany-based management and IT consulting subsidiary. It also agreed to transition Best Buy India’s GCC to TCS and turn it into an AI capability centre.
Among major industry segments, BFSI grew 2.5%, while manufacturing and technology and services each grew 3.1% sequentially in constant currency. Consumer declined 0.7%.
India revenue fell 10.3% sequentially, which TCS attributed to project deferrals in regional markets. Krithivasan said the company expected the deferred projects to return in subsequent quarters.
TCS’s workforce stood at 598,056 at the end of the quarter, with attrition at 13.3%. Learning hours rose 17% sequentially to 17.1 million as the company continued building skills in AI and other emerging technologies.
The company said the demand remained stable even as clients continued to scrutinise discretionary spending. Krithivasan said the company expected its pipeline and client conversations to support medium-term growth, while stopping short of providing a forecast for the next quarter.
TCS maintained its long-term operating margin aspiration of 26%-28% as it continues to invest in strategic partnerships, talent and new growth areas.
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