Tata Consultancy Services reported a net profit of ₹13,884 crore for the July to September quarter, up 15% from ₹12,075 crore a year ago. Revenue rose 11.2% to ₹73,188 crore. TCS announced the results on October 8.
The headline number from the quarter, though, was AI. TCS said its annualised AI revenue crossed $3.1 billion, more than 10% of its total revenue. Last quarter, that figure was $2.6 billion.
On paper, that’s a strong quarter. Look closer and it’s a steadier, slower one than the 15% suggests.
Why the 15% profit growth needs context
Last year’s September quarter wasn’t a normal one for TCS. The company booked ₹1,135 crore in restructuring costs, mostly severance payments, as exceptional items. That one-time charge pulled last year’s reported profit down to ₹12,075 crore.
Without that charge, last year’s profit was ₹12,904 crore. Compared with that figure, this quarter’s profit grew about 7.6%, not 15%.
In dollars, the currency TCS earns most of its money in, the picture is flatter still. TCS’s own results show net income of $1,450 million this quarter, against $1,464 million a year earlier before the one-off charge. That’s a dip of about 1%.
Against analyst expectations, the result was mixed. Profit and revenue came in slightly above estimates, but operating profit and the operating margin were slightly below.
Rupee revenue vs dollar revenue
The same gap shows up in revenue. In rupees, revenue grew 11.2%. In dollars, revenue was $7,642 million, up just 2.4% from a year ago, or 2.8% in constant currency.
Most of that difference comes down to the rupee, which has weakened sharply against the dollar over the past year. It was near a record low of 96.84 this week. When TCS converts its dollar earnings into rupees, a weaker rupee makes the rupee numbers look bigger.
If you want to know how much more work TCS is actually winning, the dollar and constant-currency numbers are the ones to watch.
AI is becoming a real business for TCS
The AI figure is the part worth watching most closely.
“Annualised” means TCS took its current quarterly AI revenue and projected it over a full year. So $3.1 billion is a run rate, not money already earned over 12 months. Even so, moving from $2.6 billion to $3.1 billion in one quarter is a big step.
“AI momentum remained strong, with annualized AI revenues now exceeding $3 billion,” said Aarthi Subramanian, TCS’s President and Chief Operating Officer.
It also speaks to the question investors have asked all year: will AI take work away from IT services companies, or bring them new work? For TCS, at least, it’s bringing new work for now. The order book was healthy too, with total contract value of $9.6 billion for the quarter.
How the rest of the business did
“We are pleased with the broad-based growth in all our international markets and most industry segments,” said K Krithivasan, TCS’s CEO and Managing Director.
The details mostly back that up. Growth from the previous quarter, in constant currency:
- Banking and financial services, the biggest segment at 32.8% of revenue, grew 2.5%.
- Manufacturing and technology and services each grew 3.1%.
- The UK grew 3.5%, while North America, at 48.3% of revenue, grew just 0.4%.
- Consumer business shrank 0.7%, and it’s the only segment smaller than it was a year ago.
- India fell 10.3% from the previous quarter, though it’s still up 6.0% from a year ago.
The operating margin was 24.0%, about the same as last quarter but lower than a year ago. Headcount rose by 4,258 to 598,056, and attrition was steady at 13.3%.
Dividend
TCS declared a second interim dividend of ₹12 per share. The record date is October 14, 2026, and the payment date is October 30, 2026.
What it means for investors
TCS shares have had a difficult 2026. The stock had fallen about 35% this year before these results, partly on fears that AI would hurt Indian IT companies.
This quarter doesn’t settle that debate, but it pushes back on the worst version of it. AI revenue is growing fast, the order book is solid, and hiring has resumed. On the other side, dollar growth is slow, North America barely grew, and the 15% profit headline is mostly a comparison with last year’s one-off charge.
If you’re following TCS as an investment, these are the numbers worth tracking over the next few quarters:
- Dollar and constant-currency revenue growth, not just rupee growth
- AI revenue as a share of total revenue, to see if it keeps climbing past 10%
- Operating margin, to see whether AI work is as profitable as traditional work
- North America, which is nearly half the business
If terms like operating margin and constant currency are new to you, our guides on important financial numbers you must know before investing and fundamental analysis for beginners explain them simply. For a broader checklist, see how to understand a company before investing.
You can read the full figures in TCS’s official Q2 FY27 press release and Business Standard’s report on the results.
