Total Contract Value (TCV)
$10B
+16% YoY
Robust deal wins including a mega deal with Tryg Insurance.
TCS
Information Technology
15 Oct 2025
Tata Consultancy Services Ltd — Q2 FY26
TCS delivered a solid Q2 FY26 with revenue of INR 65,799 crore (+2.4% YoY, +0.8% CC QoQ) and operating margin of 25.2% (+70bps QoQ).
✓ Verified against BSE filing
2-Min Summary
TCS delivered a solid Q2 FY26 with revenue of INR 65,799 crore (+2.4% YoY, +0.8% CC QoQ) and operating margin of 25.2% (+70bps QoQ). Growth was broad-based across verticals and geographies, led by India and emerging markets. Total contract value (TCV) reached $10 billion (+16% YoY), including a mega deal with Tryg Insurance. Management guided FY26 international revenue growth to be better than last year's ~70bps CC. The company announced a major AI strategy pivot, including a subsidiary for a 1 GW sovereign AI data center (phased over 5-7 years, ~$6.5B total) and the acquisition of ListEngage. Key risk: lingering macro uncertainty and client discretionary budget tightness could temper growth momentum.
Key Numbers
Headcount
509,314
-3% QoQ
Decline due to voluntary attrition and release of ~1% workforce with skill mismatch.
AI-skilled associates
160,000
N/A
Number of associates with higher-order AI skills, part of internal AI transformation.
PFSA TCV
$3.2B
N/A
Product and platform-based deal wins contributing to overall TCV.
Management Guidance
FY26 international revenue growth better than FY25
Management expects constant currency international revenue growth for FY26 to exceed the ~70bps achieved in FY25.
revenueOperating margin aspirational band of 26%-28%
CFO reiterated the goal to return to the aspirational margin band of 26%-28%, with continued improvement expected.
marginsAI data center subsidiary with 1 GW capacity over 5-7 years
Board approved creation of a subsidiary to build a sovereign AI data center in India, with capacity up to 1 GW, phased over 5-7 years at ~$1B per 150 MW.
capexContinued workforce release of ~2% mid-senior level
CHRO indicated that the planned release of ~2% of mid-to-senior workforce with skill mismatch is halfway done; further releases may continue.
otherKey Risks
Macro uncertainty and discretionary budget tightness
Lingering economic uncertainties keep clients cautious on discretionary spending, which could slow revenue growth.
medium · management_commentaryCybersecurity incidents at clients causing project delays
Recent cyber attacks on TCS clients led to project start delays, though TCS systems were not compromised.
medium · analyst_questionAI data center investment risk and low ROE
The capital-intensive data center business will have lower ROE than TCS's historical 50%+, though management expects overall ROE to remain benchmark.
medium · analyst_questionPotential deflation from AI productivity gains
AI-driven productivity improvements could reduce revenue per project, though management expects scope expansion to offset.
low · analyst_questionNotable Quotes
We have delivered a good performance in the backdrop of continued macro challenges.
TCS will become the largest AI-led technology services company, enabling business, government, and society.
We are not chasing a particular number here, but we will continue to do this throughout the year.