TCS profit rises 15% as AI revenue crosses $3.1 billion

Tata Consultancy Services (TCS) reported Q2 FY27 revenue of ₹73,188 crore, up 11.2% year-on-year, while net profit increased 15% to ₹13,884 crore. The results, announced on October 8, 2026, highlighted steady revenue growth, strong deal bookings and expanding AI-related business. Key highlights Revenue: ₹73,188 crore, up 1.3% QoQ and 11.2% YoY. Net profit: ₹13,884 crore, up 4% QoQ and 15% YoY. Operating margin: 24%, unchanged sequentially. Deal wins: Total Contract Value (TCV) of $9.6 billion. AI business: Annualised AI revenue crossed $3.1 billion. Dividend: Second interim dividend of ₹12 per share, with October 14, 2026, as the record date. Why it matters: TCS’s profit growth and deal pipeline indicate continued business momentum. Annualised AI revenue exceeding $3.1 billion highlights the growing contribution of AI-related services. However, subcontracting costs rose to 6.8% of revenue from 5.9%, while operating margins remained flat sequentially. Market reaction: On October 9, TCS shares gained over 4% during the reported session, while the Nifty IT index advanced 3.39%, reflecting positive sentiment following the results. What to watch next: Deal conversion into revenue, AI-related demand, margin sustainability and growth across key international markets. Learning outcome: Strong revenue and profit growth must be assessed alongside deal conversion, operating margins and AI monetisation to understand whether business momentum can remain sustainable. Disclosure: I am a SEBI Registered Research Analyst. This post is for informational and educational purposes only and is not investment advice.