TCS Q1FY27 results: Net profit rises 4.6% to ₹13,349 cr, revenue up 13.9%

Revenue for the company grew 13.9 per cent in reported terms to Rs 72,275 crore from Rs 63,437 crore in Q1 FY26

In what was expected to be a slow-growth quarter, India's largest information technology (IT) services company, Tata Consultancy Services (TCS), managed to beat analyst estimates on growth, even as it saw revenue from artificial intelligence (AI) deals growing by over 13 per cent year-on-year (Y-o-Y). 

The Mumbai-headquartered firm reported a net profit of ₹13,349 crore for the first quarter of 2026-27 (Q1FY27), up 4.6 per cent from ₹12,760 crore in the year ago period. 

TCS’ revenue grew 13.9 per cent in reported terms at ₹72,275 crore compared to ₹63,437 crore for Q1FY26. 

Sequentially, the firm’s revenue was up 2.2 per cent, and 0.4 per cent in constant currency terms. 

 

TCS’ performance was a beat on revenue growth, and a marginal miss on profit compared to Bloomberg estimates, which projected revenue at ₹71,862 crore, and net profit at ₹13,394 crore. 

TCS said its annualised AI revenue came in at $2.6 billion, up 13.6 per cent quarter-on-quarter (Q-o-Q). This now represents about 9 per cent of the firm’s revenue. 

TCS signed net-new AI-led deals such as the $800 million mega deal with global industrial company SKF and a multi-million deal with ServiceNow, among others, in Q1. 

The total contract value (TCV) of the order book in Q1FY27 was at $9.5 billion, compared to $ 9.4 billion in the year-ago period. However, it was lower than the $12 billion announced in Q4FY26. 

Of the $9.5 billion, North America TCV was at $4.7 billion, banking, financial services and insurance (BFSI) TCV was $2.5 billion, and consumer business was at $1.4 billion. 

K Krithivasan, chief executive officer and managing director, TCS said: “Q1FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macroeconomic headwinds. I expect demand to improve sometime in Q2. So, we are generally optimistic on Q2”. On AI-led deals, he shared that over the last five quarters the company has signed six mega deals in the AI space. 

While addressing analysts post the results, Krithivasan shared that the company is witnessing an uptick in demand, but this varied from sector to sector. “If you see the BFSI vertical, it is doing very well in the US and we also are quite optimistic on the sustained growth in the BFSI segment. Manufacturing, we believe, will turn around in Q2, life sciences could turn around in Q2, tech services will continue to grow. So, we are quite optimistic on these (fronts). The consumer business will turn around once we have a better market sentiment on geopolitics,” he added. 

Krithivasan also said that HyperVault, TCS’ AI and sovereign data center unit, is strengthening the IT services company’s market positioning and deepening 360-degree partnerships with client and ecosystem partners. 

“Overall results are marginally better than our expectations both on QoQ constant currency dollar sales growth (though led by higher growth in India  and Asia Pacific) and on recurring Ebit margin. After muted employee additions in past few quarters and FY26, TCS increased its headcount by 1.6 per cent QoQ in Q1FY27 (highest sequential addition in the last 15 quarters),” said an Equirus Securities report. 

Ebit denotes earnings before interest and taxation. 

Though growth was spread across verticals and geography, India grew by 22.9 per cent YoY, and 7.6 per cent sequentially.

The US, TCS’ biggest geography, grew 2.2 per cent YoY, but slipped 0.4 per cent QoQ. Continental Europe was up 4.3 per cent YoY, however, the UK was down marginally by 0.6 per cent. 

Among verticals too, TCS saw growth across sectors. BFSI, which was under pressure over the past few quarters, grew 2.4 per cent YoY and 1.6 per cent QoQ during the period under consideration. 

TCS Executive Director - President and Chief Operating Officer Aarthi Subramanian said, “Q1 saw strong growth momentum across our services portfolio with multiple AI transformation wins. AI demand continues across IT operations, software engineering modernisation, business process transformation and enterprise platform implementation. The nature of engagements ranges from AI-led optimisation to large scale AI native transformation programmes.” 

TCS’ Q1 operating margins stood at 24 per cent, down 130 basis points (bps) on a sequential basis. Margins had a negative impact of 170 bps due to wage hikes. headcount at the end of June 30, 2027 was 593,798, with 9,279 employees added during the period, compared to the previous quarter. Attrition for the quarter came in at 13.9 per cent. However, the firm’s headcount was down 19,271 YoY.