TCS Q2 net profit up 1.4% YoY at Rs 12,075 crore; IT co declares Rs 11 dividend, unveils giga AI plan

Tata Consultancy Services (TCS) reported a 1.4 percent year-on-year rise in consolidated net profit to Rs 12,075 crore for the quarter ended September 30, 2025, slightly below Street estimates. A CNBC TV18 poll had pegged the IT major’s profit at Rs 12,528.3 crore and revenue at Rs 65,114 crore. TCS declared a second interim dividend of Rs 11 per share, with October 15 as the record date and November 4 as the payment date.

Net profit was down sequentially as the company declared restructuring expenses of Rs 1,135 crores, driven by the ongoing job cuts that will impact over 12,000 employees.

Revenue and margins

TCS' revenue for the quarter stood at Rs 65,799 crore, marking a 3.7 percent sequential rise and 0.8 percent growth in constant currency terms. Operating margin expanded by 70 basis points to 25.2 percent, while net margin improved to 19.6 percent. Net income as per the company’s consolidated statement was Rs 12,904 crore. Cash flow from operations stood at 110 percent of net income.

AI-led strategy and new initiatives

TCS said it is “setting course to become the world’s largest AI-led technology services company,” announcing a series of strategic investments, including a new business entity to build a 1 GW capacity AI datacentre in India and the acquisition of ListEngage, a Salesforce-focused firm.

CEO and MD K Krithivasan said, “we are on a journey to become the world’s largest AI-led technology services company,” adding that the AI infrastructure initiative reflected TCS’s long-term commitment. The company also launched what it called the world’s largest “Ideate and Build with AI” hackathon, involving 2.75 lakh employees, as part of its effort to embed an “AI-first” culture.

Segment and market performance

Growth was broad-based across verticals, led by life sciences and healthcare (up 3.4 percent QoQ in constant currency), BFSI (1.1 percent), and manufacturing (1.6 percent). Regional markets saw a slight decline.

In geographic terms, India was among the fastest-growing markets with 4 percent sequential growth. The Middle East and Africa grew ]5.9 percent, and Continental Europe was up 1.4 percent.

Key deals and partnerships

The company reported total contract value (TCV) of $10 billion for the quarter, with multiple large deals across sectors. Key wins included:

• A seven-year, $647 million partnership with Scandinavian insurer Tryg to simplify operations across Denmark, Sweden, and Norway.
• A multi-hundred-million-dollar contract with a leading global healthcare firm to drive AI and cloud-led transformation.
• Renewed long-term collaborations with ALDI South, Weatherford International, and The Warehouse Group for digital and AI-driven modernisation.
• New partnerships in Mexico, the Philippines, and Finland to support AI and cloud expansion.

Earlier today, TCS stock rose 1.14% ahead of the quarterly earnings to end at Rs 3,061.7 on NSE.

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