TCS’ Stable Q2 Demonstrates the Resilience of its Diversified Portfolio

K Krithivasan, Chief Executive Officer and Managing Director, said: “We saw the cautious trends of the last few quarters continue to play out in this quarter as well. Amidst an uncertain geopolitical situation, our biggest vertical, BFSI showed signs of recovery. We also saw a strong performance in our Growth Markets. We stay focused on sharpening our value proposition to our clients, employees and other stakeholders”.

Samir Seksaria, Chief Financial Officer, said: “We made strategic investments this quarter in talent and infrastructure to ensure sustainable growth. Our disciplined execution resulted in superior cash conversion. Our longer-term cost structures remain unchanged, and we remain confident in our ability to continue delivering industry leading profitable growth”.

Milind Lakkad, Chief HR Officer, said: “We welcomed 11,000 associates in the first half of the year, and we remain on track for trainee onboarding as planned. We have also commenced the campus hiring process for FY26. Our strong talent base and increased learning intensity prepares us well for the complex technology transformations that customers entrust us with”.

Growth by Domain:

Services: Clients prioritized initiatives that accelerate customer acquisition, modernizing digital core including ERP platforms and improve enterprise observability, regulatory compliance and security posture.

While discretionary spends were impacted, clients continued to invest and see improved outcomes using AI/GenAI. We are setting up interdisciplinary AI offices/CoEs to strategize, prioritize and implement AI at scale.

Cyber Security, AI.Cloud and TCS Interactive led the growth this quarter.

Win themes across key deals involved vendor consolidation, managed services, UX transformation, technology simplification, legacy modernization, enterprise network transformation, automation and GenAI initiatives.

AI.Cloud: We are seeing continued momentum in AI/GenAI adoption, with the underlying technology gaining maturity at a very rapid pace. There are now over 600 AI/GenAI engagements deployed successfully in production or in various phases of development. Our customers are increasingly concentrating on integrating AI throughout their entire enterprise value chain, rather than working on isolated use cases. We are also enabling AI/GenAI capabilities across our suite of product and solutions. We are continuing to deepen our skillsets across our workforce through platforms like AI Experience Zone and TCS WisdomNext^TM. On Cloud front, we continue to see good growth in Legacy Modernization, Data Platform Modernization and Technology Landscape Simplification.

Cyber Security: Clients continue to up their spend on improving their security posture. Our offerings aimed at security guardrails for AI/GenAI adoption are seeing good traction. Governance, Risk & Compliance (GRC), Vulnerability Management, Identity and Access Management and Cloud Security were top areas of growth. We are also seeing traction for Security Operations transformation, Ransomware resiliency and Secure GenAI.

TCS Interactive: The interactive services saw continued growth for this quarter. Marketers are focusing on customer acquisition, retention and product differentiation. This presents us opportunities in areas such as harnessing data to uncover valuable consumer segments, improving CX, creating personalized content, and ensuring adtech/martech are providing the best ROI for the business. Among many of our clients, the remit of CMOs is expanding to include digital transformation. Spending has improved slightly over the quarter, and marketers are looking for better ROI for their investment using technology, data and AI.

IoT & Digital Engineering: IoT & Digital Engineering continues to see demand driven by Factory of the Future (Smart Manufacturing), OT Modernization, Intelligent Product Engineering, Connected Services & Connected Assets, and Sustainability. Key services that saw traction during the quarter included MES and Industry 4.0, IOT Platform Services and Digital Engineering. IoT driven transformation across connected devices and manufacturing is seeing higher adoption, demand is growing for Industrial AI (Digital Twins) combined with GenAI. Among industry groups, TSS and LSHCERU saw greater traction.

Enterprise Solutions: Clients continue to invest in their ERP modernization. They are partnering with TCS in their business and CX transformation journey for solutions in supply chain optimization, claim modernization, sustainability and reimagining sales & service channels. GenAI saw good traction across industries. Our transformation approach, along with our contextual knowledge and industry pre-configured solutions including TCS Crystallus™ are enabling customers to accelerate their growth and transformation journeys. We continue to invest and strengthen our joint go-to market approach with our partners.

Cognitive Business Operations: During this quarter, we saw multiple large wins across IT Infrastructure and business operations with robust TCV closure powered by Cognix™ led operating model transformation. Key trends witnessed were vendor consolidation, employee experience enhancement, workplace transformation, network reimagination and first-time outsourcing. Good traction in business process services, with Banking, Insurance, Cards and Supply Chain operations doing well.