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7 min read | Updated on October 10, 2025, 10:31 IST
SUMMARY
TCS share price: Analysts note that by setting up multiple AI and sovereign data centres to deliver technology-enabled services—and aiming to become the world's largest AI-led technology services company—TCS has reassured investors that it is not only keeping pace with the global AI race but positioning itself at the forefront.
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TCS on Thursday reported a 1.39% increase in consolidated net profit to ₹12,075 crore for Q2 FY26. | Image: Shutterstock
Last seen, the stock was trading at ₹3,051.40, down 0.34% on the NSE.
Some analysts note that by setting up multiple AI and sovereign data centres to deliver technology-enabled services—and aiming to become the world's largest AI-led technology services company—TCS has reassured investors that it is not only keeping pace with the global AI race but positioning itself at the forefront.
This strategic move, they say, is expected to ease concerns about domestic IT lagging in AI adoption and signals the company’s strong commitment to building futuristic, innovation-driven capabilities. TCS’s bold initiative is expected to spark anticipation across the market that other IT firms will soon unveil similar initiatives aimed at advancing AI infrastructure and staying competitive in the evolving tech landscape.
Citi notes that the headcount reduction of 3% QoQ highlights a weak outlook. It also sees the risk to AI-led productivity in existing businesses. Hence, analysts have maintained a cautious view.
Jefferies, in its note, said that TCS posted weak Q2 growth. As regards data centres, the investment firm said that the move will add limited upside. Growth in key markets is yet to recover, and a 3% QoQ decline in headcount does not bode well. "While TCS' intent to invest in growth is promising, its data centre foray has limited synergies. Cut earnings estimates by up to 1% and expect 4% EPS growth over FY26," Jefferies added.
Avendus, on the other hand, said that the IT major results were better than expected; that reversed a string of poor performances in the last few quarters. It added that the deal-win momentum remains strong and provides visibility on recovery in revenue through the second half of the current year and FY27.
A deal extension from BSNL would augment revenue in the near term. The upgrade in the rating is also driven by near-term underperformance, which makes the risk-reward attractive and restricts downside, it added.
TCS on Thursday reported a 1.39% increase in consolidated net profit to ₹12,075 crore in the July-September quarter of FY26 (Q2 FY26).
Revenue from operations for Q2 FY26 rose 2.39% to ₹65,799 crore, up from ₹64,259 crore logged in Q2 FY25, according to a regulatory filing by TCS, which kicked off the Q2 earnings season for tech firms.
Seen sequentially, profit declined by 5.3%, while revenue increased by 3.7%.
TCS also declared a second interim dividend of ₹11 per equity share of ₹1 each of the company. The second interim dividend shall be paid on Tuesday, November 4, 2025, and the record date for the same is October 15, 2025, the company said.
Further, TCS reported a widening of the margin to 25.2%, which was 0.70% up from the preceding quarter. The margin figure excludes the severance pay, it added.
Revenues from India declined 33.3% during the quarter under review largely because of the hit due to the absence of BSNL revenues. The country now accounts for 5.8% of the total revenues, compared to 8.9% in the same quarter of the previous fiscal year.
Its chief executive officer (CEO) and managing director, K. Krithivasan, said that the overall demand environment is the same as last quarter but reiterated that the international revenue growth in FY26 will be better than that in FY25.
The IT services major on Thursday announced a massive plan to enter the data centre space with an aim to build up to 1 GW of capacity, which will entail over USD 6.5 billion in investments.
The Tata group firm will see partial equity investments from financial investors and also funding through debt, according to the company management.
"We have set a target of 1 GW. We will be doing it in phases. We expect to do 1 GW in 5-7 years," TCS' chief executive K. Krithivasan said at an investor call after the company announced its September quarter earnings.
As per the company's calculations, every 150 MW will entail an investment of $1 billion, which translates into over $6.5 billion for the overall capacity building.
"This would be a combination of equity and debt, and we will also bring in finance partners for the equity," the CEO said.
The entire data and compute capacity will be hosted in India, and the company hopes to sell it to pure-play artificial intelligence providers, deeptech companies, hyperscalers, and "to a great extent" to the government entities in India and the Indian enterprises, Krithivasan said.
The company will invest in the "passive components" in building the capacity, while the clients will take care of the compute and storage, he said.
TCS sees a huge amount of unmet demand in this segment, which made the company look at the space, he said, stressing that it will also deliver more stable annuity-based revenues.
The Tata group's announcement to jump into the segment comes amid increasing calls for data localisation. TCS has also called them "sovereign data centres".
The overall data centre industry stood at less than 1 GW last year but is expected to grow rapidly.
TCS' chief financial officer Samir Sekhsaria said revenues from the data centre business will start accruing in 18-24 months' time.
He admitted that the high investments will decrease the overall return ratios delivered by the service sector company but added that this company will not dent the TCS-level return on equity.
The IT services major Tata Consultancy Services (TCS) on Thursday said it has acquired US-based ListEngage for $72.80 million (about ₹646 crore).
Headquartered in Framingham, Massachusetts, ListEngage is a full-stack Salesforce partner that specialises in marketing cloud, CRM, data cloud, Agentforce, and AI advisory services for enterprises.
With this acquisition, TCS adds over 100 professionals to its Enterprise Solutions unit in the United States, the company said in a regulatory filing.
"This US-based acquisition is an important step in scaling our Salesforce capabilities globally.
"ListEngage's AI advisory services, marketing cloud capabilities, and Agentforce expertise will enhance our offerings and execution to serve the needs of marketing stakeholders in enterprises. This acquisition will further deepen the strategic partnership that TCS has with Salesforce. We welcome ListEngage's talented team to TCS," TCS COO Aarthi Subramanian said.
TCS, which had stunned all in July by announcing plans to lay off 12,000 employees, reported a 20,000 drop in the overall headcount at the end of the quarter and disclosed that it took a ₹1,135 crore hit due to severance packages offered to mid-to-senior-level employees who were asked to go.
TCS also declared its vision to be the "world's largest artificial intelligence technology services" player in the next few years and announced a slew of initiatives centred around that, including interventions in training the workforce.
Its chief financial officer, Samir Sekhsaria, said it prioritised wage hikes during the quarter by giving the increase to 80% of its workforce.
It signed new deals of over $10 billion, which were higher both on-quarter and on-year, and Krithivasan said that, barring the UK from a geographical perspective and the consumer sector, the company is witnessing a sequential growth in its topline from all other segments.
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