TCS Q2 Profit Jumps 15% to Rs 13,884 Crore on AI Revenue Surge

Tata Consultancy Services posted a 15% year-on-year jump in consolidated net profit to Rs 13,884 crore for the September quarter, driven by strong international demand and accelerating AI adoption. Revenue climbed 11.2% to Rs 73,188 crore. The company’s annualized AI revenue crossed $3.1 billion, now representing over 10% of total revenue. Meyka grades TCS a B+ with a 12-month forecast of Rs 3,185, suggesting upside from current levels.

Strong profit growth on international momentum

TCS reported consolidated net profit of Rs 13,884 crore in Q2 FY27, up from Rs 12,075 crore a year earlier. Revenue from operations rose 11.22% year-on-year to Rs 73,188 crore. Operating margin held steady at 24%, while net margin stood at 19%. The company generated Rs 14,190 crore in net cash from operations, equivalent to 102.2% of net income, signaling robust cash conversion.

AI revenue surges past $3 billion milestone

Annualized AI revenue crossed $3.1 billion in Q2, accounting for more than 10% of total revenue. According to CEO K Krithivasan, the company announced strategic partnerships with Porsche AG and Best Buy, including AI capability center transformation deals. Demand for AI-native solutions and autonomous global business services accelerated during the quarter.

Segment growth and workforce expansion

Banking, financial services and insurance grew 2.5% sequentially in constant currency, while manufacturing and technology services each grew 3.1%. Total contract value stood at $9.6 billion. TCS added 4,258 employees on a net basis, bringing total workforce to 598,056. Last-twelve-month attrition in IT services remained stable at 13.3%.

Dividend increase and shareholder returns

The board approved a second interim dividend of Rs 12 per equity share for FY27, up from Rs 11 a year ago. The record date is October 14, with payment scheduled for October 30. TCS continues to prioritize shareholder returns alongside reinvestment in AI and emerging technologies.

Final Thoughts

TCS delivered solid Q2 results with 15% profit growth and AI revenue exceeding $3 billion. Meyka’s B+ grade and Rs 3,185 yearly forecast suggest the stock has room to run from current levels, though technical indicators show RSI at 37.71 and MACD negative, signaling near-term caution.

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