Tata Consultancy Services edged past revenue forecasts on AI‑fueled demand, as its crucial North America business returned to growth and helped steady a seasonally soft quarter.
On January 12, 2026, India’s largest IT services company reported October–December revenue of ₹670.87 billion, a touch above the ₹666.76 billion consensus tracked by LSEG. Net profit fell 14% year over year to ₹106.57 billion, with management pointing to one‑time restructuring charges, the impact of India’s new labour codes, and legal costs. Total contract value came in at $9.3 billion for the quarter.
North America returned to growth after two years, a notable turn in TCS’s biggest market after an extended slowdown in client spending. Five of the firm’s eight regions grew, led by Middle East & Africa and Continental Europe.
AI work is becoming a measurable revenue stream at TCS, even as global tech budgets remain cautious. The company said its annualised AI services revenue has reached AI services now generate $1.8 billion annually, roughly 6% of overall sales. Executives said robust deal momentum and AI programs underpin confidence heading into calendar 2026, though U.S. macro uncertainty and higher visa costs keep customers conservative.
Operationally, margins were steady around 25% excluding exceptional items, underscoring disciplined execution despite mixed demand across verticals like banking and retail during the holiday-heavy quarter.
Revenue: ₹670.87 billion, modestly above expectations. Net profit: ₹106.57 billion, down 14% year over year on one‑offs. Order book (TCV): $9.3 billion. AI: $1.8 billion annualised run‑rate. Geography: North America back to growth; Middle East & Africa and Continental Europe led regional gains. The board also approved shareholder returns, declaring Board declared a ₹57 per-share dividend, including a ₹46 special payout.
Management is leaning into AI-led transformation projects while watching for a gradual demand recovery in North America. Investors will focus on how quickly pilot AI engagements scale into larger, multi-year programs—and whether discretionary spending in BFSI and retail firms normalizes through 2026.