IT major Tata Consultancy Services (TCS) on Thursday reported a 7.6% year-on-year rise in consolidated net profit for the September quarter, supported by double-digit revenue growth and continued momentum in AI-led services, with annualised AI revenue crossing $3 billion.
The company posted a consolidated net profit of Rs 13,884 crore, compared with Rs 12,904 crore in the corresponding quarter last year. The bottomline also rose nearly 0.3% sequentially.
Revenue from operations for the July-September quarter stood at Rs 73,188 crore, up 11.2% from Rs 65,799 crore a year earlier, while rising 1.3% quarter-on-quarter from Rs 72,275 crore. In constant currency terms, revenue grew 0.5% sequentially, led by banking, financial services and insurance (BFSI), Manufacturing, and Technology & Services.
K Krithivasan, chief executive officer and managing director, said: "We are pleased with the broad-based growth in all our international markets and most industry segments. This quarter we announced two unique deals with Porsche and Best Buy which represent a new category of transformation partnerships. Together with our clients, we are building repeatable value platforms that will industrialize AI at scale."
Meanwhile, operating margin declined 120 basis points year-on-year to 24% from 25.2% in the year-ago quarter, while it was flat sequentially.
Deal activity remained healthy, with total contract value (TCV) rising to $9.6 billion from $9.5 billion in the previous quarter.
The company said AI momentum remained strong during the quarter, while cybersecurity remained a priority as customers focused on resilience and recovery.
Annualised AI revenue increased to $3.1 billion during the quarter from $2.6 billion in the June quarter, crossing 10% of revenue. The company said demand for delivering business outcomes with AI-native solutions, AI-led transformation of enterprise systems and autonomous global business services continued to accelerate.
TCS said AI-led productivity gains were being offset in some sectors by new opportunities in modernisation and vendor consolidation. "I don't want to say it is complete, but I think there are a number of opportunities in these industries we are working on, which gives us the confidence that the growth can continue," Krithivasan said.
The company also said clients were increasingly seeking agentic AI control planes to manage governance, cost, performance and the lifecycle of AI agents.
Further, the IT major said its AI revenues were coming at a higher margin than the company average, while overall portfolio pricing remained broadly stable. Management, however, said it continued to prioritise investments and did not give a specific timeline for when these investments would peak.
Among geographies, the UK was the fastest-growing major market, recording 4.5% year-on-year constant currency growth, followed by Asia Pacific at 4.1% and India at 6%. North America, which contributes nearly half of TCS' revenue, grew 1.5% year-on-year, while Continental Europe grew 3.3% and the Middle East and Africa rose 2%.
Across industry verticals, BFSI, which contributes about one-third of revenue, grew 3.9% year-on-year in constant currency, while Energy, Resources and Utilities grew 5.7%. Consumer Business declined 1%, while Manufacturing grew 4.2% and Life Sciences & Healthcare rose 0.5%. Technology & Services grew 4.8% year-on-year.
TCS also announced a dividend of Rs 12 per equity share for the quarter.
