TCS Q2 net up 1.4 pc on wider margins; reports 20,000 drop in headcount
Mumbai, Oct 9 (PTI) India’s largest IT services company Tata Consultancy Services (TCS) on Thursday reported around 1.4 per cent rise in consolidated net profit. ₹12,075 crore with a wider profit margin in the July-September quarter.
Revenues from operations increased by 2.39 percent in the second quarter of fiscal year 2025-26 ₹65,799 crore ₹64,259 crore in the last year quarter, according to the regulatory filing of TCS, which kicks off the second quarter earnings season for technology firms.
The company, which surprised everyone by announcing that it planned to lay off 12,000 employees in July, reported a decrease of 20,000 in the total number of employees at the end of the quarter and announced that it would take a year for this to happen. ₹1,135 crore was lost due to severance packages offered to middle and senior level employees and asked to go.
TCS also announced its vision to become the “world’s largest AI technology services” player in the next few years and announced a number of initiatives focused on this through interventions in training its workforce.
Chief executive officer and managing director K Krithivasan said the overall demand environment was the same as last quarter but reiterated that international revenue growth in FY26 will be better than FY25.
It has signed new deals worth over $10 billion, which is higher on both a quarterly and yearly basis, and Krithivasan said that excluding the UK geographically and from the consumer sector, the company has witnessed sequential growth in revenues from all other segments.
In terms of profitability, the margin widened to 25.2 percent, an increase of 0.70 percent compared to the previous quarter, it said. Severance pay is not included in the margin figure.
Samir Sekhsaria, the company’s chief financial officer, said they prioritized wage increases during the quarter by giving raises to 80 percent of the workforce.
Revenues from India fell by 33.3 per cent in the quarter under review, largely due to the hit from the absence of BSNL revenues. The country currently accounts for 5.8 percent of total revenue, compared to 8.9 percent in the same quarter of the previous fiscal year.
TCS also announced the setting up of a Wholly Owned Subsidiary (WOS) in India to set up multiple Artificial Intelligence and Standalone Data Centers to provide Infrastructure and technology-enabled Services.
In the filing, the company said it would set up a new business to build a 1GW capacity AI data center in India.
The plan calls for an investment of over $6.5 billion over seven years and TCS will also seek equity partners for the project.
It also announced that it acquired a 100 percent stake in US-based ListEngage for US$72.80 million (excluding management incentives and costs). ListEngage is a full-service Salesforce partner specializing in Marketing Cloud, CRM, Data Cloud, Agentforce and AI consulting services for businesses.
TCS announces second interim dividend distribution ₹11 per equity share of Re 1 each of the company. The second interim dividend will be paid on Tuesday, November 4, 2025 and the record date for the same is October 15, 2025, the company said.
Shares of TCS have been determined ₹3,061.95 per capita on BSE on Thursday, an increase of 1.16 percent compared to the previous close. Financial results were announced after market hours.
