TCS Financial Breakdown: Revenue, Profit & Ratios
Tata Consultancy Services (TCS), India's largest IT services company by revenue, reported its Q2 FY27 results on 8 October 2026 — consolidated net profit of Rs 13,884 crore (up 4% quarter-on-quarter), revenue of Rs 73,188 crore, and a second interim dividend of Rs 12 per share. The numbers cap an unusual stretch: TCS's profits and cash flows have kept growing, yet the stock is down roughly 35% in 2026, trading at a discount to its own history and to the broader IT sector. Here is a full financial breakdown — revenue trend, profitability, balance sheet, key ratios, segment split, shareholding, and how TCS stacks up against Infosys, HCLTech and Wipro.
Q2 FY27 Results (8 October 2026) — The Fresh Trigger
TCS opened the Q2 FY27 earnings season with a quarter that beat revenue and profit estimates, though operating margins missed expectations:
- Revenue: Rs 73,188 crore, up 1.3% QoQ and 11.2% YoY in rupee terms. In constant currency, growth was 0.5% QoQ (international revenue +1.2% QoQ CC); dollar revenue was $7,642 million (+0.2% QoQ).
- Net profit: Rs 13,884 crore, up ~4% QoQ (Q1 FY27: Rs 13,349 crore) and roughly 14.5% YoY, ahead of the ET Now poll estimate of Rs 13,785 crore.
- EBIT: Rs 17,553 crore (+1.4% QoQ); EBIT margin held flat at 24%, below the 24.4% the Street expected.
- Deal wins: Total contract value of $9.6 billion (Q1 FY27: $9.5 billion), including two marquee deals with Porsche and Best Buy described by management as a new category of transformation partnerships.
- AI momentum: Annualised AI revenue reached $3.1 billion — over 10% of total revenue, up from $2.3 billion at the start of FY26.
- Dividend: Second interim dividend of Rs 12 per share (face value Rs 1); record date 14 October 2026, payment date 30 October 2026.
- Cash conversion: Net cash from operations was Rs 14,190 crore, or 102.2% of net income.
- Workforce: 5,98,056 employees at quarter-end; trailing-12-month IT services attrition at 13.3%.
CEO K Krithivasan pointed to broad-based growth across international markets and most industry segments, while the stock closed the day at Rs 2,075.25, down 0.42% — a muted reaction that reflects how far sentiment has fallen: TCS trades about 38% below its 52-week high of Rs 3,350.
Business Overview
Founded in 1968 and headquartered in Mumbai, TCS is the flagship company of the Tata Group and India's largest IT services exporter. It provides application development, infrastructure, consulting, engineering, and AI-led business transformation services to clients across banking, retail, manufacturing, life sciences, telecom and other verticals. Its product stable includes TCS BaNCS (banking software) and other platforms. With FY26 revenue of Rs 2.67 lakh crore and a market capitalisation of about Rs 7.6 lakh crore, TCS remains roughly 1.5x the size of its nearest Indian rival, Infosys.
Revenue Growth Trend (FY22–FY26, Consolidated)
| Financial year | Revenue (Rs crore) | YoY growth |
|---|---|---|
| FY22 | 1,91,754 | — |
| FY23 | 2,25,458 | ~17.6% |
| FY24 | 2,40,893 | ~6.9% |
| FY25 | 2,55,324 | ~6.0% |
| FY26 | 2,67,021 | ~4.6% |
Revenue has compounded at about 9% a year over FY19–FY26, but the deceleration is unmistakable: from 17.6% in FY23 to 4.6% in FY26, as global clients cut discretionary tech spending amid tariff uncertainty, geopolitical risks, and a wait-and-watch stance on AI. TCS's own management says the bulk of these headwinds is now behind, and Q2 FY27's 11.2% YoY rupee revenue growth is the strongest in recent quarters.
Profitability Trend
| Financial year | EBITDA margin | Net profit (Rs crore) | Net margin | EPS (Rs) |
|---|---|---|---|---|
| FY22 | 27.7% | 38,449 | 20.1% | 103.6 |
| FY23 | 26.3% | 42,303 | 18.8% | 115.2 |
| FY24 | 26.3% | 46,099 | 19.1% | 125.9 |
| FY25 | 26.4% | 48,797 | 19.1% | 134.2 |
| FY26 | 25.4% | 49,454 | 18.5% | 136.0 |
Profit has grown more slowly than revenue (6.6% CAGR vs 9.0% over FY19–FY26). EBITDA margin has compressed from 27.7% in FY22 to 25.4% in FY26 — wage hikes, supply-side inflation and AI-led pricing pressure in legacy deals have all played a part. Net margin has similarly eased from 20.1% to 18.5%. The Q2 FY27 EBIT margin of 24% is flat sequentially, suggesting margin stabilisation rather than a rebound.
Balance Sheet Strength
As of the latest reported data (FY26):
- Reserves and surplus: about Rs 1,20,373 crore, with equity share capital of Rs 361.8 crore (face value Rs 1 per share) — a fortress-like equity base.
- Debt: effectively zero. The debt-to-equity ratio is nil on a borrowings basis (a 0.11x figure on some data screens reflects lease liabilities only) — TCS carries no meaningful interest-bearing debt.
- Return ratios: ROE of ~46–49% and ROCE of ~62–66% (FY26), among the highest in Indian large-caps — the company earns roughly half its net worth as profit every year.
- Book value: about Rs 334 per share.
Cash Flows (FY26)
| Item | Rs crore (FY26) |
|---|---|
| Cash flow from operations | 52,094 |
| Capital expenditure | 4,078 |
| Free cash flow | 48,016 |
TCS converts nearly all its profit into cash — free cash flow was positive in five of the last eight years per the compiled financial history, and Q2 FY27 cash from operations covered 102.2% of net income. The asset-light model means capex is minimal, leaving enormous cash available for dividends and buybacks.
Key Ratios Snapshot (as of 8 October 2026)
| Metric | Value |
|---|---|
| Market capitalisation | ~Rs 7.6 lakh crore |
| Share price | ~Rs 2,075 |
| P/E (TTM) | ~15.3x (IT sector ~18.2x) |
| Price-to-book | ~6.4x |
| Dividend yield | ~5.2% |
| ROE | ~46–49% |
| ROCE | ~62–66% |
| Debt-to-equity | ~0x (effectively debt-free) |
| 52-week range | Rs 1,977 – Rs 3,350 |
The standout here is valuation: TCS trades at about 15x earnings — below the sector's ~18x and well below its own five-year historical median. The market is pricing in the growth slowdown; the question is whether the Q2 FY27 acceleration and the AI pivot justify a re-rating.
Segment Split: Verticals and Geographies
Revenue by industry vertical (FY26):
| Vertical | Share of FY26 revenue |
|---|---|
| BFSI (Banking, Financial Services & Insurance) | ~32.0% |
| Consumer Business (Retail, Travel, Consumer Goods) | ~15.5% |
| Life Sciences & Healthcare | ~10.4% |
| Manufacturing | ~8.8% |
| Technology & Services | ~8.4% |
| Energy, Resources & Utilities | ~6.0% |
| Communication & Media | ~5.8% |
| Regional Markets & Others | ~13.1% |
Revenue by geography (Q4 FY26): North America ~48.5%, UK ~17.2%, Continental Europe ~15.6%, Asia Pacific ~8.3%, India ~6.0%, Middle East & Africa ~2.5%, Latin America ~1.9%.
In Q2 FY27, growth was led by BFSI (+2.5% QoQ in constant currency), Manufacturing (+3.1% CC) and Technology & Services (+3.1% CC). Nearly one in every three rupees TCS earns comes from BFSI clients, and almost half its revenue is booked in North America — both are strengths in good times and concentration risks in bad ones.
Shareholding Pattern (June 2026)
| Shareholder | Stake |
|---|---|
| Promoters (Tata Sons) | 71.77% |
| Foreign institutions (FII) | ~9.66% |
| Domestic institutions (DII) | ~13.41% |
| Public and others | ~5% |
Promoter holding has been rock-steady at 71.77% for five straight quarters, with zero pledged shares. FIIs have trimmed their stake (down to ~9.7%), while domestic institutions hold about 13.4% — a pattern that partly mirrors the stock's de-rating as foreign investors rotated out of Indian IT.
Dividend History
| Financial year | Dividend per share (Rs) |
|---|---|
| FY24 | 73 |
| FY25 | 126 |
| FY26 | 110 |
| FY27 (so far) | 12 (interim; record date 14-Oct-2026) |
TCS is one of India's most generous dividend payers — the current yield of ~5.2% is among the highest in the Nifty 50. Alongside dividends, the company has historically returned large sums through buybacks.
Peer Comparison (FY26)
| Company | FY26 revenue (Rs cr) | FY26 PAT (Rs cr) | Revenue growth | Market cap (Rs lakh cr) | P/E |
|---|---|---|---|---|---|
| TCS | 2,67,021 | 49,454 | +4.6% | ~7.63 | ~15.3x |
| Infosys | 1,78,650 | 29,440 | +9.6% | ~4.20 | ~13.9x |
| HCLTech | 1,30,144 | 16,642 | +11.2% | ~3.26 | ~18.7x |
| Wipro | 92,624 | 13,197 | — | ~1.57 | ~11.9x |
| Tech Mahindra | 56,815 | 4,811 | +7.2% | — | — |
TCS remains the undisputed leader on scale — its revenue is 1.5x Infosys's and its PAT exceeds the combined profits of HCLTech and Wipro. But FY26 growth was the slowest among peers (Infosys +9.6%, HCLTech +11.2%), and the margin gap persists: TCS's ~24–25% EBIT margin remains well above HCLTech's ~17% and Wipro's ~17%, reflecting its pricing power and scale. All four large IT stocks are down 25–40% in 2026 — the entire sector is in a de-rating, not just TCS. Also read our earlier breakdowns: Reliance Industries financial breakdown, Trent financial breakdown, and HDFC Bank financial breakdown.
Key Risks
- AI-led deflation: Analysts estimate AI automation could erode 2–3% of traditional IT services revenue annually — TCS must grow AI-native work ($3.1B annualised and rising) faster than legacy work shrinks.
- Concentration: ~32% of revenue from BFSI and ~48.5% from North America leaves TCS exposed to US banking cycles and tariff/geopolitical shocks.
- Margin pressure: EBITDA margin has fallen from 27.7% (FY22) to 25.4% (FY26); Q2 FY27's flat 24% EBIT margin shows stabilisation, not recovery.
- Currency: A sharp rupee appreciation against the dollar would compress reported revenue and margins, since costs are largely in rupees.
- Competition: Infosys and HCLTech grew faster in FY26; aggressive pricing by peers could force TCS to trade margins for growth.
FAQs
What was TCS's revenue in FY26?
TCS reported consolidated FY26 revenue of Rs 2,67,021 crore (about Rs 2.67 lakh crore), up 4.6% year-on-year.
What is TCS's Q2 FY27 dividend?
The board declared a second interim dividend of Rs 12 per equity share. The record date is 14 October 2026 and the dividend will be paid on 30 October 2026.
What is TCS's ROE and ROCE?
TCS's return on equity is around 46–49% and return on capital employed around 62–66% (FY26) — among the highest in Indian large-caps, reflecting a debt-free, asset-light business model.
Is TCS debt-free?
Effectively yes — TCS carries no meaningful interest-bearing debt; its debt-to-equity ratio is nil on borrowings (a small 0.11x figure on some screens captures lease liabilities only).
Why is the TCS share price down in 2026?
Despite growing profits, TCS is down roughly 35% year-to-date as investors priced in slower global IT spending, AI-led pricing pressure and macro uncertainty. The whole Indian IT pack is down 25–40% in 2026. TCS now trades at ~15x earnings, below the sector average of ~18x.
Conclusion
TCS's Q2 FY27 results show a company whose engine still runs: Rs 73,188 crore of quarterly revenue, Rs 13,884 crore of profit, $9.6 billion in fresh deals, AI revenue crossing 10% of the mix, and cash conversion above 100% of net income. The financial profile remains elite — near-zero debt, ~46–49% ROE, a 5.2% dividend yield, and free cash flow of ~Rs 48,000 crore in FY26. The open questions are all about the future: whether AI-native growth can outrun deflation in legacy services, whether BFSI and North America concentration turns from asset to risk, and whether the market's current 15x multiple — a steep discount to TCS's own history — proves to be the opportunity the headline numbers suggest it is.
Disclaimer: This article is for educational purposes only and is not investment advice. Financial figures are sourced from company results, exchange filings and financial data portals. Please consult a qualified financial advisor before making investment decisions.