Tata Consultancy Services Ltd.Margin 24%, AI run-rate $3.1B

Tata Consultancy Services reported Q2 FY27 revenue of ₹73,188 crore, up 1.3% sequentially and 11.2% year-on-year in rupees.

In constant currency, revenue grew 0.5% sequentially and 2.8% year-on-year. Operating margin was stable at 24%. Total contract value was US$9.6 billion, excluding the Porsche and Best Buy deals, and annualized AI revenue reached US$3.1 billion, over 10% of revenue. BFSI, Manufacturing and Technology and Services led growth, while Consumer Business declined 0.7% sequentially. Management said the demand environment has not materially changed since last quarter and that it is prioritizing investment in partnerships, acquisitions, talent and a larger bench.

The CFO did not repeat the earlier target of exiting FY27 at an operating margin of 25% or more, said the proposed MHP acquisition could dilute margin by about 50 basis points in the second half, and kept the 26% to 28% long-term aspiration. The CEO said he is confident growth momentum will continue on a medium-term basis. The company gave no revenue or earnings guidance, and India revenue was hit by a project deferral.