TCS Shares in Focus after Q2FY26 Net Profit Grew 1.4% YoY and 1 GW AI Data Center Plan

On Friday, the Tata Consultancy Services share price traded 0.27% higher from its previous closing price of Rs 3,061.70 on NSE after reporting Q2FY26 performance, backed by strong operational metrics, strategic investments in AI-led transformation, and forward-looking management guidance drawn from its latest regulatory filings and press releases.

Financial Performance

For the quarter ending September 30, 2025, TCS posted consolidated revenues of Rs 65,799 crore, up 3.7% quarter-over-quarter and 2.4% year-on-year, with net profit rising 1.4% YoY to Rs 12,131 crore. On the international front, revenues reached $7,466 million, up 0.6% sequentially, with net income of $1,464 million and a net margin of 19.6%. Despite sectoral headwinds, TCS expanded its EBIT margin to 25.2%, a 70-basis-point improvement quarter-over-quarter, driven by disciplined execution and strategic investments. The company declared a second interim dividend of Rs 11 per share, continuing its shareholder-friendly stance.

The growth was broad-based, with BFSI growing by 1.1%, Technology and Services by 1.8%, Life Sciences and Healthcare by 3.4%, and Manufacturing by 1.6% in constant currency terms. Geographically, North America remained the dominant market, contributing nearly half of total revenues.

Strategic Capex Initiatives

As per sources, the TCS capital expenditure (capex) plan aimed at building a 1-GW AI-driven data center ecosystem within India is expected to cost around $6 to $7 billion spanning over the next five to seven years. This significant investment will be structured through a mix of debt and equity, and is expected to create a next-generation data infrastructure business line, laying the foundation for TCS’s ambition to be the world’s largest AI-led technology services provider.

Management anticipates that initial revenues from this venture will begin flowing in 18 to 24 months after commencement, signifying a long-term commitment to future-ready technologies and scalable digital transformation.

Management Guidance and Business Outlook

CEO K Krithivasan, in his quarterly commentary, re-emphasized TCS’s strategic vision to become the foremost AI-led technology company, with transformation anchored in talent, infrastructure, ecosystem partnerships, and customer value. The company’s new AI and Services Transformation unit will catalyze rapid scaling and integration of AI across its enterprise engagements. CFO Samir Seksaria highlighted that margin improvement reflects both operational discipline and investments in capability, wage hikes, and new partnerships.

On workforce dynamics, TCS continued its focus on reskilling and rationalization. During Q2FY26, attrition fell to 13.3%, partly due to efficient talent management amid ongoing restructuring. The company is prioritizing growth domains like data, cloud, and AI-driven enterprise transformation across verticals, with a strong pipeline of deals totaling $10 billion in Total Contract Value (TCV) for the quarter.

Innovation and Recognition

Research and innovation remain a cornerstone as TCS filed 239 patents during the quarter and now holds over 5,086 patents granted. The company received top leadership rankings from Gartner, IDC, Everest, NelsonHall, and other global analyst firms for its AI, cloud, and transformation services.

Conclusion

TCS’s Q2FY26 results underscore the company’s strong execution and transformation agenda. By doubling down on capex for AI-led infrastructure, focusing on operational efficiency, and maintaining a robust deal pipeline, Management’s confident guidance and shareholder returns further reinforce its standing as a global technology powerhouse.