TCS Q2 earnings: Net profit rises 1.4% annually to ₹12,075 crore, revenue rises 2.4%; company declares dividend of ₹11/share

Tata Consultancy Services (TCS), the country's largest software services company, on Thursday, October 9, reported a consolidated net profit of ₹12,075 crore in the second quarter of the current financial year, marking an annual increase of 1.4% from ₹11,909 crore in the same period last year. On a sequential basis, however, TCS' net profit declined 5.4% from ₹12,760 crore in the previous quarter.

TCS' revenue from operations rose 2.4% year-on-year (YoY) to ₹65,799 crore for the September quarter, compared with ₹64,259 crore logged in the same period last year. On a sequential basis, international revenue grew 0.6% in constant currency terms.

Segment-wise, the company’s core Banking, Financial Services and Insurance (BFSI) vertical led growth, posting a 4% quarter-on-quarter (QoQ) increase to ₹25,717 crore. Revenue from the manufacturing segment rose 3.6% QoQ to ₹6,631 crore, while the consumer business segment saw a 2% uptick to ₹10,351 crore. Revenue from the Communication, Media, and Technology segment advanced 3.88% to ₹9,802 crore. The Life Sciences and Healthcare vertical reported the strongest growth, climbing 7.2% sequentially to ₹6,884 crore.

Focus on AI infrastructure and talent transformation

During the quarter, TCS stepped up its investments in artificial intelligence, announcing plans to build a world-class AI infrastructure business, including a 1 GW capacity AI data centre in India. The company also completed the acquisition of ListEngage, strengthening its Salesforce capabilities.

TCS is nurturing an “AI-first” culture through initiatives such as the world’s largest ‘Ideate and Build with AI’ Hackathon, which saw participation from 2.75 lakh employees.

“I am pleased with our strong Q2 performance. We are on a journey to become the world’s largest AI-led technology services company. The investments, including the building of a world-class AI infrastructure business, demonstrate our commitment to this transformation,” said K Krithivasan, CEO and MD of TCS.

CFO Samir Seksaria added, “We achieved good growth momentum across all verticals this quarter. Our disciplined execution helped us expand margins while making strategic investments in wage hikes, capabilities, and partnerships.”

Major deals in Q2

TCS expanded its strategic partnership with Tryg, a leading Scandinavian non-life insurance company, through a seven-year $647 million deal to standardise operations and drive digital transformation across Denmark, Sweden and Norway.

The company also launched a new AI-driven operations centre in Mexico City, its eighth in the country, highlighting its commitment to innovation in Latin America.

Additionally, TCS secured a deal with a leading Australian bank to transform its mortgage and institutional banking back-office operations using AI, GenAI, intelligent automation, and data-driven insights.

In terms of geography, the North American market remained the largest contributor, accounting for 47.6% of profits during the September quarter. Europe contributed 17%, while the Indian market accounted for 9%.

The board of TCS declared an interim dividend of ₹11 per share.

TCS shares ended 1.09% higher at ₹3,060 ahead of its earnings announcement.