TCS Q2 results: Revenue and net profit could see single-digit growth sequentially; key focus on AI business and interim dividend

Tata Consultancy Services (TCS), India's largest IT services company, will announce its Q2FY27 results on Thursday, October 8, 2026, kickstarting the second quarter earnings season for major companies. TCS is expected to release its earnings after market hours.

The Tata Group company is expected to report low single-digit revenue growth of 1% to 2% QoQ and 10% to 12% YoY during the September quarter. The revenue is expected to remain between ₹72,950 and ₹73,200 crore, led by marginal recovery in international business. TCS reported revenue of ₹72,275 crore in the previous quarter and ₹65,799 crore in Q2FY26.

On the profitability front, the IT major may report 2 to 4% rise in net profit sequentially and 10% to 13% rise on a yearly basis. Net profit could remain in the range of ₹13,550 to ₹13,670 crore. The company reported a net profit of ₹12,075 crore in Q2FY26 and ₹13,349 crore in the previous quarter.

According to experts, TCS's new deal wins are expected to remain in the range of $9 to $10 billion in line with the $9.5 billion reported in the first quarter. Meanwhile, EBIT margin may improve by 20 to 40 basis points to 24.2 to 24.4% sequentially.

Investors will closely watch new deal wins, including AI revenue and order wins. Management’s commentary on the business outlook during the second quarter results is an important thing to watch out for. Investors will also look forward to the second interim dividend announcement. TCS has already fixed October 14 as the record date for the interim dividend.

Ahead of the Q2 result announcement, TCS shares closed 0.9% lower at ₹2,080 on Wednesday, October 7. So far this year, TCS shares are down over 35% and are trading very close to its 52-week low of ₹1,976. Indian IT stocks have witnessed a downfall in 2026 amid disruption caused by AI and lower IT spending by global clients.

Technical outlook

TCS goes into its Q2FY27 results stuck in a narrow range. It is trading between ₹2,038 and ₹2,145 for about two weeks, after a steep fall from the ₹2,400 zone in early September.

The bigger trend still favours the bears. The 20-day exponential moving average (EMA) crossed below the 50-day EMA in mid-September, and the stock is below both. Earlier this week TCS touched ₹2,145 and was pushed back, leaving a long upper wick right at the 20-day EMA.

The Directional Movement Index (DMI) shows the selling pressure is fading, but sellers have the upper hand. Meanwhile, ADX has flattened near 25. That suggests the downtrend is slowing into consolidation rather than speeding up.

What TCS options are pricing in for Q2

With TCS futures at ₹2,074, the at-the-money 2,080 straddle is trading at ₹130. That means the options market expects a move of about ±6.3% by the 27 October expiry, which puts the expected range at roughly ₹1,944 to ₹2,204.

In the last 12 quarters, TCS shares moved more than 6.3% on the day after the results only once, a 6.6% rise in Q1FY25. In 10 of those 12 quarters, the next-day move was less than 4%.

The picture changes over 10 days. In six of the last 12 quarters, TCS moved more than 6.3% within 10 sessions of its results, including a 9.4% rally after the Q1FY27 numbers.

Options strategy for TCS Q2 results

The chart and the options data point the same way. TCS is stuck in a ₹2,038 to ₹2,145 range, and the market expects a break of the range once the results are out.

If you expect the move to continue after the results: A long straddle, buying the ATM (at-the-money) call and put, could be considered. However, option premiums usually fall sharply the morning after the results as volatility drops. If the stock reacts only mildly on the first day, the trade may show a loss early on, even if TCS moves more in the following days.

If you expect TCS to stay in the range: A short straddle, selling the ATM call and put, aims to benefit from the drop in volatility after the results. The trade makes money if TCS stays between ₹1,950 and ₹2,210 until expiry. Since TCS has moved more than 6% within 10 days of its results in half of the last 12 quarters, strict stop-losses are important. Traders may also choose to exit once volatility falls instead of holding until expiry.

If you want to plan the breakout in one direction: The range limits give clear trigger points. A close above ₹2,145 (the 20-day EMA) would favour a bull put spread aimed at the 50-day EMA near ₹2,200. Meanwhile, a breakdown below ₹2,038 would favour a bear call spread aimed at ₹2,000 to ₹1,975.