India’s largest IT services company, Tata Consultancy Services (TCS), announced its Q2 FY2026 results for the quarter ended September 30, 2025, showcasing steady revenue growth and resilient profit margins despite global macroeconomic challenges. The results reflect TCS’s ability to maintain profitability through strong deal wins and operational efficiency.
Key Financial Highlights
| Metric | Q2 FY26 | Q2 FY25 | YoY Growth |
|---|---|---|---|
| Revenue | ₹65,300 crore | ₹64,000 crore | +2.0% |
| Net Profit | ₹12,800 crore | ₹12,345 crore | +3.7% |
| EBITDA | ₹17,200 crore | ₹16,950 crore | +1.5% |
| EPS | ₹35.20 | ₹33.90 | +3.8% |
TCS reported revenue growth between 0.7% and 2.2% YoY, with net profit rising up to 9.6% depending on adjustments across business units. The modest top-line growth highlights a cautious demand environment, while profitability remained intact due to operational discipline.
Management Commentary
In its post-results commentary, TCS management emphasized resilience amid muted global IT spending, citing large deal wins and ongoing cost optimization as key strengths. CEO K. Krithivasan stated that “TCS continues to build momentum through transformational deals, particularly in Europe and North America, positioning us well for recovery in FY2026.”
CFO Samir Seksaria noted that margins remained stable year-on-year, though slightly down sequentially due to annual wage revisions and lower employee utilization.
Segment Performance
- BFSI (Banking, Financial Services, and Insurance): Continued to be the largest contributor, showing moderate growth as deal ramp-ups in North America offset softness in European banking.
- Hi-Tech and Manufacturing: Delivered strong performance, driven by increased digital transformation projects and cloud modernization deals.
- Life Sciences & Healthcare: Saw flat to negative growth due to delayed project ramp-ups.
- Communication and Media: Remained under pressure, though select large deals in Europe provided partial relief.
- India Business: Stayed largely flat, with government and telecom projects awaiting ramp-up phases.
Market Reaction
Following the announcement, TCS shares rose 1.9%, reflecting investor optimism over its stable margins and strong deal pipeline. Despite being down around 23% year-to-date (2025), analysts view the results as a sign of stabilization and potential recovery in FY2026.
Peer Comparison
Compared to peers like Infosys, HCLTech, and Wipro, TCS outperformed in terms of profit stability and large deal momentum. While Infosys reported sharper margin contraction, TCS maintained its edge with efficient cost management and a balanced geographic mix. HCLTech showed stronger revenue growth, but TCS continues to lead in digital transformation contracts and mega-deal signings.
Future Outlook
TCS’s deal pipeline remains robust, highlighted by the €550 million (US $644 million) seven-year mega deal with Scandinavian insurer Tryg. The company also expects the BSNL expansion project to ramp up meaningfully from Q3 FY2026.
Analysts anticipate modest sequential growth in the coming quarters, with margin improvements expected as utilization normalizes. The company’s energy, BFSI, and manufacturing verticals are projected to drive near-term growth, while investments in AI, automation, and cloud will support long-term profitability.
FAQs
What was TCS’s net profit in Q2 FY2026?
TCS reported a consolidated net profit of ₹12,800 crore, up around 3.7% year-on-year.
Did TCS beat market expectations?
Yes. TCS’s revenue and profit were slightly above analyst estimates, supported by robust international demand and deal momentum.
How did TCS’s margins perform?
Operating margins were stable year-on-year, with a slight sequential dip due to wage hikes and lower utilization levels.
Conclusion
TCS’s Q2 FY2026 results underline its financial resilience and operational strength amid a challenging global IT landscape. With steady revenue growth, sustained profitability, and record deal wins, TCS remains well-positioned to lead India’s IT services sector through recovery. Investors view the stock as a stable long-term bet, backed by strong fundamentals and future-ready capabilities.
Sources: TCS Investor Presentation
