As TCS announced its Q2 FY26 results, the company set a bold vision, saying it’s on a path to become the world’s largest AI-led technology services company. The Indian tech giant reported a modest revenue jump of 3.7% quarter-on-quarter (QoQ), and net profit increased 8.4% year-on-year (YoY). The revenues stood at ₹65,799 crore, while the net profits rose to ₹12,904 crore.
The company, however, incurred a one-off restructuring expense of Rs 1,135 crore. This brings down the net profit for the quarter substantially.
The company’s operating margin expanded by 70 basis points to 25.2%. Showing confidence in its generative AI path, TCS announced a new business vertical to build a one-gigawatt capacity AI data centre in India. Along with this, the company also announced the acquisition of ListEngage for its capabilities in Salesforce.
The tech giant also launched an AI-driven operations centre in Mexico City, its eighth operations centre in North America. The company claims to have built a workforce of over 11,000 skilled associates over the last 22 years.
TCS also said it will foster an AI-first culture and talent, as well as “ideate and build with AI” Hackathon with 275,000 TCS employees.
Modest Growth
Meanwhile, TCS’s cash flow from operations stood at 110.1% of net income and the company declared an interim dividend of ₹11 per share.
“We are on a journey to become the world’s largest AI-led technology services company,” K Krithivasan, CEO and MD, said in the release. “Our journey is anchored in bold transformation across talent, infrastructure, ecosystem partnerships and customer value. The investments including the building of a world-class AI infrastructure business demonstrate our commitment to this transformation.”
Meanwhile, Aarthi Subramanian, executive director, president and COO, said the company delivered strong growth momentum led by data, cloud and AI powered enterprise transformation.
TCS claims that partnerships with top global companies are AI-driven, including collaborations with insurers, healthcare firms, retail groups, and telecom to embed AI and generative AI solutions for enhanced operational efficiency and innovation. But separate revenue from AI-led operations has not been reported.
Last month, during the earnings call, Accenture CEO Julie Sweet said the returns from AI have been underwhelming. Despite this, the company reported $5.9 billion in generative AI bookings this year, taking the total tally to $8.9 billion in the past financial year.
On the workforce front, TCS’s leadership team emphasised investments in talent and wage hikes aligned with future-ready capability building.
Beyond AI, TCS recorded broad-based growth across verticals and regions despite industry challenges. BFSI, Life Sciences, Healthcare, Manufacturing, and Technology Services showed quarter-on-quarter constant currency growth of 1.1%, 3.4%, 1.6%, and 1.8% respectively.
The Americas remained the largest regional market, with North America contributing 48.8% of revenue.
The company secured strategic multi-year deals totaling $10 billion in Total Contract Value. It expanded existing partnerships with clients such as Tryg in Scandinavia and ALDI South in retail infrastructure modernisation.
TCS continued to focus on cloud migration, digital transformation, cybersecurity, and innovation, exemplified by partnerships with Qualcomm for edge AI solutions and the Centre for Development of Advanced Computing (C-DAC) for India’s sovereign cloud ecosystem.
The company also advanced sustainability and innovation efforts through alliances with global research institutes.
Samir Seksaria, chief financial officer, said, “We achieved good growth momentum across all verticals this quarter. Our disciplined execution helped us expand our margins while making strategic investments.”
Internal Reset
TCS entered its Q2 FY25-26 results season amid a deep internal reset. The company is restructuring its workforce and operating model as part of its “Future-Ready” agenda, a push to deploy AI at scale, invest in next-gen tech, and expand in new markets.
The planned release of about 12,000 employees, mostly in mid and senior roles, marks a shift in how TCS is aligning talent to growth areas like AI and cloud. While described as a careful transition with no client impact, it signals a major cultural change for India’s largest IT employer.
TCS is also advancing its localisation strategy, with about half its US workforce now hired locally, a move aimed at strengthening client delivery and reducing visa dependency.
The Trump administration recently moved to exorbitantly hike H-1B visa fees to prioritise American jobs, pushing many in the industry fear the move could disadvantage Indian IT firms and talent. US Senator Charles Grassley and Richard J Durbin have questioned the company over its H-1B hiring amidst the mass layoffs globally.
In the last quarter (Q1 FY26), the company posted revenue of ₹63,437 crore and a net income of ₹12,760 crore.
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