Tata Consultancy Services (TCS) reported a steady start to FY27, posting a consolidated net profit of ₹13,349 crore (~ $1.40 billion) for the April-June quarter, a 4.6-5% year-on-year increase from ₹12,760 crore (~ $1.34 billion) in the corresponding period last year. Revenue from operations increased 13.9% to ₹72,275 crore (~ $7.58 billion), beating analysts’ expectations of around ₹72,030 crore. However, on a sequential basis, profit declined about 2.7% from ₹13,718 crore (~ $1.44 billion) reported in the March quarter, while revenue grew around 2.2%.
Revenue growth was largely supported by stronger spending from banking clients, continued execution of large digital transformation programmes and favourable currency movements, which increased the value of overseas earnings. TCS maintained an operating margin of 24% and a net margin of 19.2%, indicating its ability to protect profitability despite pricing pressure and longer client decision cycles.
The company also generated operating cash flow of ₹12,412 crore (~$1.30 billion) during the quarter, representing almost 93% of net profit, assuring strong cash generation and efficient execution capabilities. The healthy cash flow also allowed the company to continue its shareholder return policy by announcing an interim dividend of ₹12 per equity share, with July 15 as the record date and July 31 as the payment date.
Importantly, AI continued to emerge as one of TCS’ fastest-growing businesses. The company said its annualised AI-related revenue has reached about $2.6 billion, up from around $2.3 billion previously, showing growing enterprise adoption of generative AI, intelligent automation and AI-led business transformation. Management indicated that AI engagements are increasingly moving beyond pilot projects into large-scale production deployments across banking, manufacturing, insurance and consumer businesses. These projects are often integrated with cloud migration, cybersecurity, data engineering and application modernisation.
TCS also expanded its workforce despite widespread concerns that AI could reduce hiring across the technology industry. The company added around 9,300 employees during the quarter — its strongest quarterly hiring in more than 3 years — taking its total workforce to 593,798 employees. Employee retention improved further, with last-twelve-month attrition in IT services falling to 13.6%.
On the business front, TCS reported a Total Contract Value (TCV) of $9.5 billion in new deal wins during the quarter, lower than the $12 billion reported in the previous quarter. Major contracts signed during Q1 included engagements with SKF, Canada Life and Elopak. Among business segments, Banking, Financial Services and Insurance (BFSI) remained the strongest growth driver, recording 2.4% growth. The results come at a time when India’s around $315-billion IT services industry is navigating slower client spending, AI-led business model changes and global macroeconomic uncertainty.