TCS management discussed Q2 results, broad-based growth across verticals barring consumer and communications, strong AI revenue growth, and margin pressure due to higher subcontractor costs

Fri 9 Oct 2026

North America growth

0.4%

AI annualized revenue

over $3 billion

AI revenue share

10% of revenue

New-age services share

35 to 40%

Currency tailwind this quarter

10 basis points

Heard on business television between 08:43:33 - 08:46:33 IST.

• Management said growth was broad-based across BFSI (third consecutive quarter of growth), manufacturing and technology services, with only consumer and communication businesses lagging.
• AI annualized revenue crossed $3 billion, about 10% of revenue, up from 1.8% at analyst day and growing steadily each quarter (2.1%, 2.3%, 2.6%, 3.1%).
• New-age services (AI, cybersecurity, cloud, enterprise transformation) remained stable at 35-40% of revenue.
• Margins did not expand as expected despite only 10 basis points of currency tailwind, due to investments in partnerships, M&A, talent hiring and a bench built from early hiring; management expects some margin recoupment next quarter.
• Fees to external consultants (business associates/subcontractors) rose to 7.1% of revenue from 6.4% last quarter and 5.2% a year ago, attributed to short-term demand-supply mismatches in specific locations and skill sets; management said TCS has the lowest subcontractor dependence among peers and will work to reduce it.

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