TCS Q2 FY26 Results: Net Profit Rises 1.4% to ₹12,075 Crore; Dividend, Margin Trends & Growth Outlook

TCS Q2 FY26 Results Net Profit Rises 1.4% to ₹12,075 Crore; Declares ₹11 Interim Dividend

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.

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