Mumbai: Tata Consultancy Services (TCS) reported a 15 per cent rise in September-quarter net profit to Rs 13,884 crore, as artificial intelligence contributed a tenth of revenue and management expressed confidence in continued growth.
Revenue from operations increased 11.22 per cent to Rs 73,188 crore in the July-September period, compared with Rs 65,799 crore a year earlier. Revenue stood at Rs 72,275 crore in the June quarter.
AI business gains pace
Chief Executive K Krithivasan said annualised AI revenue reached USD 3.1 billion, up from USD 2.6 billion in the previous quarter.
Growth was broad-based, he said, citing the deal pipeline, contract signings and client discussions as reasons for optimism.
Chief Operating Officer Aarthi Subramanian said AI revenue was growing fastest across banking, financial services and insurance, manufacturing and life sciences.
Deal wins and margins
TCS reported contracts worth USD 9.6 billion, marginally above USD 9.5 billion in the preceding quarter. Its operating margin remained unchanged at 24 per cent.
Chief Financial Officer Samir Seksaria said AI contracts generated margins above the company average. TCS continues to seek margins exceeding 26 per cent over the longer term while investing in future growth.
However, he flagged acquisition-related pressure in the second half of FY27 and avoided providing a near-term margin target.
Hiring continues, India revenue softens
TCS added 4,258 employees on a net basis, taking its workforce to 5,98,056 at September-end. IT services attrition stood at 13.3 per cent.
Also read: DLF Sells All 172 Senior Living Homes, Gurugram Project Fetches Rs 1,985 Crore
The company recruited 10,000 freshers during Q2, following 14,000 in Q1.
India was its fastest-growing region, recording 6 per cent annual growth in constant currency. However, revenue declined 10 per cent sequentially following a project deferment. Management expects the delayed revenue to materialise later.
Dividend and growth questions
The board recommended a dividend of Rs 12 per share, with October 14 as the record date.
Mirae Asset Sharekhan analysts questioned whether AI was creating additional business or replacing traditional services, noting constant-currency revenue growth of just 0.5 per cent sequentially.
Before the results, TCS shares closed 0.42 per cent lower at Rs 2,075.25 on BSE, outperforming the benchmark’s 1.44 per cent decline.
