TCS Q2: Stable Margins, Acquisition Spree Ahead

Tata Consultancy Services (TCS) reported a steady set of numbers for Q2FY26, underscoring operational resilience and margin stability amid a mixed global demand environment. Revenue rose 0.8% quarter-on-quarter in constant currency terms to ₹65,799 crore, signaling a gradual recovery from the previous quarter's softness.

Operating income came in at ₹16,565 crore, with the EBIT margin expanding by 70 basis points sequentially to 25.2%, driven by improved utilisation levels and continued cost discipline. Net profit stood at ₹12,904 crore, translating into a 19.6% net margin even after absorbing ₹1,135 crore in restructuring costs. The company also announced an interim dividend of ₹11 per share, with the record date set for October 15.

Broad-Based Growth, Select Sector Weakness

Revenue was primarily driven by BFSI and Consumer Durables, while Regional Markets and Others delivered a healthy contribution despite facing notable headwinds. The Technology and Energy segment, however, continued to remain under pressure as clients deferred spending.

From a geography standpoint, North America held firm, while Continental Europe and the Middle East & Africa regions posted modest gains. The India business, however, recorded marginal declines due to client-specific delays and slower project ramp-ups.

Strategic Acquisition: Strengthening Salesforce and AI Capabilities

In a notable strategic move, TCS announced the acquisition of US-based ListEngage, a Salesforce-exclusive digital marketing and consulting partner. Founded in Massachusetts in 2003, ListEngage offers expertise across Salesforce Marketing Cloud, Data Cloud, CRM, and Service Cloud, helping enterprises enhance customer engagement and data-driven marketing performance.

The acquisition, approved by the board and expected to close by October 10, is worth $73 million and will deepen TCS’s Salesforce practice and expand its agentic AI-driven digital transformation capabilities. Management indicated that this marks the start of a broader acquisition-led growth phase, focused on strengthening AI, analytics, and advisory expertise globally.

Outlook: Resilient Core, Strategic Expansion Ahead

TCS continues to demonstrate strong execution and margin resilience in a challenging environment. While near-term client spending remains uneven, the company’s proactive cost control, expanding AI investments, and selectively strategic acquisitions mark the next phase of sustainable, AI-led growth.TCS appears well-placed to strengthen its leadership in the IT services landscape. 

Key Highlights at a Glance

Bottom Line

With stable earnings, healthy margins, and a strategic focus on AI-driven capabilities, TCS enters the second half of FY26 on a balanced footing. The company’s priorities now center on integrating recent acquisitions and capitalising on emerging opportunities in digital transformation and enterprise AI adoption.