BENGALURU: Tata Consultancy Services (TCS), the leading software services exporter in India, exceeded revenue projections for the second quarter on Thursday, bolstered by gains in its banking, financial services, and insurance division amid ongoing uncertainties linked to U.S. tariffs.
This performance has enhanced confidence in India’s $283 billion IT industry, which has been navigating cautious spending patterns from clients due to economic instability, particularly in North America, its major market.
“Assuming there aren’t any more unexpected tariff issues, the Indian IT sector should gradually rebound from this quarter,” remarked Piyush Pandey, an analyst at Centrum Broking, highlighting that TCS’s revenues and operating margins surpassed his forecasts.
TCS’s consolidated revenues climbed 2.4 percent to 657.99 billion rupees (approximately $7.4 billion) for the July-September quarter, outperforming the analysts’ average prediction of 650.86 billion rupees, as reported by LSEG data.
The revenue from its core banking, financial services, and insurance segment, which constitutes roughly one-third of the company’s operation, increased by 1 percent. However, revenues from its consumer, healthcare, and manufacturing sectors experienced declines of 2.9 percent, 2.2 percent, and 1.1 percent, respectively.
Net profit rose 1.4 percent to 120.75 billion rupees but fell short of the analysts’ average estimate of 126.29 billion rupees, impacted by restructuring expenses. In July, TCS revealed plans to trim 2 percent from its workforce in fiscal 2026, affecting around 12,200 positions in middle and senior management. Since the last quarter, its total employee count has dropped by 19,755.
The firm’s total order book reached $10 billion in the second quarter, up from $9.4 billion in the preceding quarter and $8.6 billion from the same period last year, offering a ray of hope to an industry grappling with challenges such as a potential 25 percent tax on outsourcing and a crackdown on H-1B visas that may disrupt traditional operations.
TCS also announced plans to establish a new business unit aimed at developing AI infrastructure, which will include a 1 GW data center in India.
Shares of TCS rose by 1.1 percent ahead of the announcement of these results.
($1 = 88.7910 Indian rupees)
