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Tata Consultancy Services Ltd

Q2 FY26

Tata Consultancy Services Q2 FY26 earnings call: Revenue & Margins

Q2 FY26 earnings call: what management guided on revenue, margins and order book.

Price₹2,465

Market cap₹8.9L Cr

P/E16.6

Updated16 Oct 2026

Read4 min read

The short version

Q2 FY26 revenue grew 0.8% sequentially in constant currency, with strong growth across most verticals, service lines, and geographies. Q2 FY26 revenue grew 0.8% sequentially in constant currency, with operating margin at 25.2% and net margin 19.6%.

From Tata Consultancy Services Ltd's Q2 FY26 earnings-call transcript · updated 16 Oct 2026.

Revenue & Sales Performance

Q2 FY26 revenue grew 0.8% sequentially in constant currency, with strong growth across most verticals, service lines, and geographies.
International business, India, and emerging markets performed well, fueling growth.
Total Contract Value (TCV) was robust at $10 billion in Q2, up 16% YoY, including a mega AI-enabled deal win.
Management reiterates FY26 international revenue growth outlook to be better than FY25 (which was about 0.7% in constant currency).
Expectation of sustained or improved growth momentum in H2 FY26 compared to H1.

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Profitability & Margins

Q2 FY26 revenue grew 0.8% sequentially in constant currency, with operating margin at 25.2% and net margin 19.6%.
Strong growth momentum across verticals, service lines, and geographies, including international business, India, and emerging markets.
Total contract value (TCV) was $10 billion in Q2, up 16% YoY, including a mega AI-enabled deal win.
FY26 outlook: International revenue growth expected to be better than FY25 (which was about 0.7% in constant currency).
Margin improvement is targeted, with a journey towards aspirational operating margins of 26-28%.
Wage hikes and pyramid rationalization expected to positively impact margins in H2 FY26.

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Capital Expenditure Plans

TCS is investing in building a Sovereign AI datacenter in India with a capacity of up to 1 gigawatt, planned over 5 to 7 years.
Estimated capex for every 150 megawatts is about $1 billion; total capex could be roughly $6.5 billion over 7 years.
The data center investment will be partially funded by equity, debt, and finance partners.
The data center will provide co-location services primarily targeting hyperscalers, AI providers, government, and Indian enterprises.

Additional capex investments include expansion of AI research and innovation hubs (e.g., new center in Singapore), an AI-driven operations center in Mexico City, software-defined vehicle innovation hubs in Europe, and a flagship TCS Interactive Design Studio in New York City.
Capital allocation policy continues to prioritize returning 80-100% of substantial free cash flow, while also investing in strategic infrastructure and ecosystem partnerships.

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Fundraising & Capital Structure

Tata Consultancy Services (TCS) has announced creation of a new subsidiary to build a Sovereign AI data center with a capacity of up to 1 gigawatt over 5-7 years.
The capex for every 150-megawatt segment is roughly $1 billion.
The investment will be phased over time and funded through a combination of equity and debt.
TCS plans to bring in finance partners to participate in the equity portion.
Samir Seksaria mentioned discussions with multiple financial partners and expects at least one or more equity partners.
The data center subsidiary is still at a very early stage, with first revenues expected in 18-24 months.

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Order Book & Pipeline

Tata Consultancy Services (TCS) reported a Total Contract Value (TCV) of $10 billion for the quarter.
BFSI contributed $3.2 billion to the TCV, and the Consumer Business Group contributed $1.8 billion.
North America accounted for $4.3 billion of the TCV.
The TCV showed a sequential increase of 6.5% and a year-on-year growth of 16%.
TCS highlighted continued robust sales momentum with a healthy mix of cost optimization, transformation deals, services, and platform deals.
The pipeline remains strong with deals spanning both new and existing business areas.

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Tata Consultancy Services Ltd — Quarterly revenue & net profit

Revenue Net profit

Jun 2025Q1 FY26

Sep 2025Q2 FY26

Dec 2025Q3 FY26

Mar 2026Q4 FY26

Jun 2026Q1 FY27

Sep 2026Q2 FY27

Reported quarterly figures (₹ Cr). Latest (Q2 FY27): revenue ₹73.2K Cr, net profit ₹13.9K Cr. Revenue and profit are scaled separately — hover a quarter for exact figures.

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What TCS's management said in earlier quarters

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Frequently Asked Questions

What were Tata Consultancy Services Ltd Q2 FY26 results?

Q2 FY26 revenue grew 0.8% sequentially in constant currency, with strong growth across most verticals, service lines, and geographies. Q2 FY26 revenue grew 0.8% sequentially in constant currency, with operating margin at 25.2% and net margin 19.6%.

What is Tata Consultancy Services Ltd share price analysis?

Tata Consultancy Services Ltd currently shows a neutral. The stock trades at a P/E of 16.6 with a market cap of ₹891,859 Cr. Investors should review the full earnings analysis for detailed insights.

Is Tata Consultancy Services Ltd planning capital expenditure?

TCS is investing in building a Sovereign AI datacenter in India with a capacity of up to 1 gigawatt, planned over 5 to 7 years.

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This analysis is AI-generated based on publicly available earnings data and the company's earnings call transcript. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.