TCS Q1 FY27 earnings: AI revenue at $2.6 billion; check three deals that shaped Q1 growth

Tata Consultancy Services (TCS) reported a nearly 14% sequential increase in its AI revenue to $2.6 billion in the first quarter of FY27.

The Indian IT services firm signed several net-new AI-led business transformation deals during the reporting quarter, including an $800 million mega deal with SKF. It also entered into multi-million-dollar agreements with ServiceNow and a Europe-based Fortune Global 50 company. These were the major drivers for the AI revenue growth.

“Q1 was characterized by strong growth across several services. We won multiple AI-led transformation deals with our dual commitment to AI-led optimization as well as innovation-led outcomes,” said TCS Executive Director—President and Chief Operating Officer Aarthi Subramanian.

Subramanian added that the deal wins validate the company’s approach to AI-led efficient IT operations, accelerated software engineering and modernization, AI-first process redesign, and the implementation of SaaS solutions and autonomous GBS. He added that TCS also signed strategic partnerships with Anthropic and Mistral to expand its AI ecosystem.

Q1 FY27 marksheet

The country's largest software services company on Thursday reported a net profit of ₹13,349 crore in the first quarter of FY27, marking an increase of nearly 5% from ₹12,760 crore in the same period last year. However, on a sequential basis, its net profit declined 2.7% from ₹13,718 crore.

Its revenue from operations advanced 14% to ₹72,275 crore at the end of the first quarter from ₹63,437 crore in the year-ago period.

Its operating margin came in at 24% and net margin was 19.2% at the end of the first quarter.

TCS reported a total contract value (TCV) of $9.5 billion for Q1 FY27.

“As customers accelerate investments in AI, modernization, cybersecurity, sovereign cloud and platform simplification, our strong deal conversion, improving client mining and expanding ecosystem partnerships position TCS well to translate opportunity into sustained growth,” said TCS CEO and Managing Director K. Krithivasan.

Here are some major AI deals from Q1 FY27

• During the reporting quarter, TCS bagged a landmark $800 million global AI-led business transformation deal with SKF, redesigning enterprise operations around an intelligent digital core.

• The company won a deal with a North American utility major for its AI-driven utility transformation into a future-ready, innovation-led operating model.

• TCS secured a multi-million-dollar deal with a Europe-based Fortune Global 50 firm for transforming employee experience and HR operations using an agentic AI-driven operating model.

• In Q1 FY27, TCS and ServiceNow have further elevated their strategic partnership to accelerate large-scale AI adoption for enterprises. In a multi-million-dollar partnership agreement, TCS & ServiceNow will leverage joint go-to-market initiatives and opportunities to drive growth and customer value.

Apart from the deal wins, TCS has expanded collaboration with Oracle during the quarter by launching India’s first Oracle AI Data Platform Lab and Center of Excellence (CoE) in Kolkata, with plans to scale across additional cities to drive AI-powered enterprise transformation.

Ahead of the earnings, TCS shares settled at ₹2,049.50 apiece on the National Stock Exchange, declining 0.39%.