TCS Q2 FY26 Results: Net Profit Rises 1.4% to ₹12,075 Crore; Declares ₹11 Interim Dividend
TCS Q2 FY26 results: Mumbai, October 9, 2025 — Tata Consultancy Services (TCS), India’s largest IT services provider, on Thursday announced its financial results for the second quarter of FY 2026 (July–September 2025). The performance was modest, reflecting a mix of resilient demand, restructuring costs, and macro-headwinds. Below is a detailed breakdown and analysis of the quarter.
TCS Q2 FY26 Results: Key Financials & Metrics
- Revenue from operations: ₹65,799 crore, up 2.4% year-on-year (YoY) from ₹64,259 crore in Q2 FY25.
- Net Profit (PAT): ₹12,075 crore, up 1.4% YoY (vs. ₹11,909 crore in Q2 FY25).
- The result, however, fell short of analyst estimates, with many projecting a higher profit level.
- Operating margin: ~25.2%, reflecting a sequential expansion of ~70 bps.
- Restructuring / severance costs: The company recognized restructuring expenses of ~₹1,135 crore in the quarter, tied to workforce realignment.
- Dividend: TCS declared a second interim dividend of ₹11 per equity share. The record date is set for October 15, 2025.
- Order book / TCV (Total Contract Value): The total contract wins in Q2 reached ~$10 billion, including a ~$644 million deal from Scandinavia’s Tryg insurer.
Segment & Geographical Performance
- Verticals: The Banking, Financial Services & Insurance (BFSI) segment showed strength and was a key driver in the quarter, offsetting softness in consumer, healthcare, and manufacturing verticals.
- Geographies:
• North America: Slight decline QoY; remains the largest contributor to revenue.
• UK & Continental Europe: Declines were observed in both markets.
• Asia-Pacific & Growth Markets: These markets posted growth, helping diversify exposure.
Strategic Moves & Investment
- AI & Infrastructure: TCS announced plans to build a 1 GW AI datacentre in India, reflecting its ambition to strengthen its AI infrastructure capabilities.
- Acquisition: The firm approved the acquisition of ListEngage, a Salesforce-focused company, to bolster its enterprise solutions offering.
- Talent restructuring: As part of cost optimization, TCS plans to reduce its workforce by ~2% in FY26, affecting over 12,000 employees globally.
Analysis & Outlook
The Q2 results reflect a subdued growth environment, with several structural challenges:
- Cost pressures from restructuring, wage inflation, and investments in AI/data capabilities weighed on profitability.
- Client spending caution in key developed markets, especially the US, amid macro uncertainties and potential U.S. outsourcing tax proposals, may dampen discretionary IT spend.
- Margins held up well despite the headwinds, signaling operational discipline. The modest margin expansion QoQ is a positive.
- The deal pipeline and TCV strength provide some buffer and visibility into upcoming revenue trajectories.
Going forward, market watchers will closely monitor how TCS balances investment in next-gen areas (AI, cloud, infrastructure) with margin protection, how demand from its top markets evolves, and how the restructuring plays out across its talent base.
