TCS shares and IT stocks rallied after TCS reported in-line Q2 numbers with strong core market growth and better gross margins on AI revenue, while a US tech sell-off on weak OpenAI revenue data further lifted Indian…
TCS shares and IT stocks rallied after TCS reported in-line Q2 numbers with strong core market growth and better gross margins on AI revenue, while a US tech sell-off on weak OpenAI revenue data further lifted Indian IT names.
- TCS stock move today
- 3.5 percent
- Infosys stock move today
- 1.8 percent
- HCL Tech stock move today
- over 2 percent
- International business revenue growth QoQ
- 1.2 percent
- AI share of revenue
- 10 percent
Heard on business television between 13:04:10 - 13:07:10 IST.
- TCS's international business revenue grew 1.2% quarter-on-quarter, which the street liked as core business strength.
- AI is about 10% of TCS's revenue and is attracting higher gross margins than the company average; clients are shifting from isolated AI use cases to human-plus-AI models in BFSI, manufacturing and healthcare.
- Hiring picked up as a demand signal: TCS added 14,000 freshers in Q1 and 10,000 in Q2; margins missed expectations as the company prioritised growth investments over margin expansion, with a long-term margin aspiration of 26-28%, flagging seasonality and the MHP acquisition as near-term headwinds.
- A sell-off in US tech stocks (Nvidia down ~3%, Microsoft down ~1.5%) followed an FT report that OpenAI's annualised revenue of $50 billion was below market expectations of $70 billion, which paradoxically boosted Indian IT stocks.
- IT stocks had been battered earlier in the year (Nifty IT down 25% year-to-date, some large caps down nearly 30%), aiding a rebound on positioning; TCS management said AI-led deflation of about 50% should ease faster than expected as new AI-driven projects offset productivity-linked deflation, citing positive growth across at least three industry segments and multiple geographies.
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