TCS opens FY27 on strong growth trajectory, AI business reaches US$2.6 billion annual run rate
Net profit for the quarter stood at ₹13,849 crore, while operating margin remained healthy at 24 per cent and net margin at 19.2 per cent.
TCS CEO-MD K. Krithivasan said the company continued to build growth momentum despite geopolitical uncertainties and macroeconomic headwinds, while Aarthi Subramanian, ED, President and COO, said customer demand remained strong across multiple service lines, with enterprises increasingly adopting AI for optimisation as well as innovation.
Mumbai: Tata Consultancy Services (TCS) has begun FY27 on a strong note, reporting robust revenue growth, a healthy deal pipeline and accelerating momentum in artificial intelligence (AI)-led business transformation. The company reported consolidated revenue of ₹72,275 crore for the quarter ended June 30, 2026, registering 2.2 per cent sequential growth and 13.9 per cent year-on-year growth in rupee terms, while constant currency growth stood at 0.4 per cent quarter-on-quarter.
One of the biggest highlights of the quarter was the rapid expansion of TCS’ AI business, which has now reached an annualised revenue run rate of US$2.6 billion, reflecting a 13.6 per cent quarter-on-quarter increase. The company also reported a Total Contract Value (TCV) of US$9.5 billion, driven by several large AI-led transformation deals signed across industries and geographies.
Net profit for the quarter stood at ₹13,849 crore, while operating margin remained healthy at 24 per cent and net margin at 19.2 per cent. The company generated ₹12,412 crore in operating cash flows, equivalent to 93 per cent of net income, underscoring strong financial discipline. TCS’ global workforce reached 593,798 employees, with attrition in IT services declining to 13.6 per cent. The Board also declared an interim dividend of ₹12 per share, with July 15 fixed as the record date and July 31 as the payment date.
Commenting on the results, K. Krithivasan, Chief Executive Officer and Managing Director, said the company continued to build growth momentum despite geopolitical uncertainties and macroeconomic headwinds.
He said TCS secured a strong order book of US$9.5 billion, including a landmark US$800 million AI-led transformation deal with global industrial manufacturer SKF, while continuing to expand its AI business and strengthen customer relationships across multiple revenue segments. According to him, growing enterprise investments in AI, cybersecurity, cloud modernisation and platform simplification position TCS strongly for sustained long-term growth.
The quarter witnessed several strategic AI-focused wins. Besides the SKF mega deal, TCS signed a multi-million-dollar strategic partnership with ServiceNow, secured a large AI transformation engagement with a North American utility company, won an AI-driven HR transformation contract with a Europe-based Fortune Global 50 enterprise, and expanded its long-standing partnership with ABB to modernise global network operations using AI-enabled automation. The company also announced strategic collaborations with Anthropic, Mistral, Google Cloud, Siemens Energy, and Oracle, significantly strengthening its AI ecosystem and enterprise offerings.
Highlighting operational developments, Aarthi Subramanian, Executive Director, President and Chief Operating Officer, said customer demand remained strong across multiple service lines, with enterprises increasingly adopting AI for optimisation as well as innovation. She said TCS’ approach combines AI-driven IT operations, accelerated software engineering, AI-first business process redesign and autonomous enterprise services, while partnerships with Anthropic and Mistral further enhance the company’s AI capabilities.
Chief Financial Officer Samir Seksaria said the company implemented annual salary hikes during the quarter while continuing targeted investments in AI capabilities and strategic partnerships without compromising profitability. Meanwhile, Chief Human Resources Officer Sudeep Kunnumal said TCS aligned global salary structures with India’s new Labour Code requirements and continued investments in AI infrastructure and next-generation learning platforms to prepare employees for the future of work.
From a business perspective, India emerged as one of TCS’ fastest-growing markets during the quarter, recording 7.6 per cent sequential constant currency growth and 22.9 per cent year-on-year growth, reflecting strong domestic demand for digital transformation and enterprise technology services. Among industry verticals, BFSI remained the largest contributor to revenue, accounting for over 32 per cent of business, while regional markets posted the strongest quarterly growth.
TCS also continued strengthening its innovation portfolio. As of June 30, 2026, the company had filed 9,803 patents, including 1,996 AI-related patent applications, with 5,670 patents granted globally. During the quarter alone, it filed 207 patents, including 163 AI-focused inventions, while receiving 170 patent grants.
The company received multiple global recognitions during the quarter, including five Google Cloud Partner of the Year Awards 2026, the CIO100 Award for its GenAI-powered Learning Coach platform, and leadership rankings across several Everest Group, ISG and Frost & Sullivan reports.
The quarter reflects TCS’ strategic transition from being primarily a digital transformation services provider to positioning itself as an AI-first enterprise transformation partner, with artificial intelligence increasingly becoming the central driver of its business growth, client engagements and long-term innovation strategy.
