TCS targets AI leadership, reports strong Q2 results

Tata Consultancy Services (TCS) reported strong Q2 FY26 results with revenue growth of 0.8% sequentially in constant currency, reaching ₹65,799 crore. The operating margin improved to 25.2%, excluding a one-time severance charge. The company announced a Total Contract Value (TCV) of $10 billion, a 16% year-on-year increase, including a mega deal with Tryg Insurance. International revenue growth for FY26 is projected to surpass the 0.70% constant currency growth seen in FY25.

A key strategic initiative involves a phased investment of approximately $1 billion per 150-megawatt capacity over five to seven years to build a 1-gigawatt sovereign AI datacenter in India. This will operate on a co-location basis, targeting hyperscalers, Indian enterprises, and government needs. TCS aims for an AI-first culture, redefining services with Human + AI models, building a future-ready talent pool, making AI real for clients, and expanding its AI ecosystem partnerships. The company also announced the acquisition of ListEngage.

TCS confirmed a wage hike for over 80% of its workforce effective September 1st, 2025. The company also noted a 1% involuntary attrition of its workforce, mainly mid and senior-level employees, with severance packages provided. TCS’s global workforce stands at 593,314 at the close of Q2 FY26. The board recommended a second interim dividend of ₹11 per share.