TCS Q2 profit rises 1.4% to ₹12,075cr, misses market expectations
What's the story
Tata Consultancy Services (TCS), India's largest IT services company, has reported a 1.4% year-on-year increase in its consolidated net profit for the quarter ending September 30. The company's profit after tax (PAT) stood at ₹12,075 crore as against ₹11,909 crore in the same period last year. However, this was lower than market expectations which had pegged TCS's profit at ₹12,573 crore.
Dividend declaration
TCS announces ₹11 per share dividend
Despite missing street estimates, TCS has announced a second interim dividend of ₹11 per equity share. The record date for the dividend is October 15 and it will be paid on November 4. The company's revenue for the quarter stood at ₹65,799 crore, marking a 3.7% sequential rise from Q1FY26's ₹63,437 crore.
Margin growth
Operating margin improves to 25.2%
TCS's operating margin improved by 70 basis points to 25.2%, while its net margin improved to 19.6%. The company's cash flow from operations stood at a robust 110% of net income, indicating strong financial health. Despite missing street estimates on profit, these figures indicate that TCS has been able to maintain a healthy cash flow and improve its margins during the quarter.
AI ambitions
TCS aims to become world's largest AI-led tech services company
TCS has also announced plans to become the world's largest AI-led technology services company. The company has announced a series of strategic investments, including a new business entity to build a 1 GW capacity AI data center in India and the acquisition of ListEngage, a Salesforce-focused firm. CEO K Krithivasan said these initiatives reflect TCS's long-term commitment toward its goal of becoming an industry leader in artificial intelligence (AI)-driven tech services.