TCS Q2 Results: Revenue Climbs 6.4% to $7.67B Amid Cautious Market, Declares ₹10 Dividend
Mumbai, India – Tata Consultancy Services (TCS Q2 2025 Highlights), India’s largest IT services exporter, announced its financial results for the second quarter of fiscal year 2025 today, painting a picture of steady growth and operational resilience amidst a challenging global economic landscape. The tech giant reported a consolidated revenue of $7.67 billion, marking a 6.4% year-over-year (YoY) growth and a 5.5% growth in constant currency terms.
TCS Q2 2025 Highlights provide insights into the company’s financial performance and strategic direction.
The results, which kick off the earnings season for India’s crucial IT sector, were closely watched by investors and analysts who had anticipated a softer quarter due to macroeconomic headwinds and cautious client spending. While the numbers reflect a continued cautious environment, they also highlight the strength of TCS’s diversified portfolio and its robust performance in emerging markets.
Financial Highlights and Management Commentary
For the quarter ending September 30, 2024, TCS posted a net income of $1.42 billion, a growth of 3.8% YoY. The company maintained strong profitability, with an operating margin of 24.1% and a net margin of 18.5%. Demonstrating disciplined execution, net cash from operations stood at an impressive $1.4 billion, representing 100.2% of the net income.
In his commentary, CEO and Managing Director K Krithivasan acknowledged the prevailing market sentiment while pointing to positive indicators. “We saw the cautious trends of the last few quarters continue to play out in this quarter as well,” he stated. “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, emphasized the company’s strategic focus on long-term growth. “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,” Seksaria said.
Performance by Industry and Geography
A deeper look into the company’s performance reveals a mixed but encouraging landscape. Growth was primarily led by the Energy, Resources and Utilities vertical, which grew by 7.0%, and the Manufacturing vertical, which saw a 5.3% increase. The crucial Banking, Financial Services, and Insurance (BFSI) segment, along with Consumer Business and Life Sciences & Healthcare, remained flat with 0.1% growth. The Communication & Media and Technology & Services verticals experienced declines.
The standout story of the quarter was the exceptional performance in growth markets, all of which outpaced the company average. India led the charge with a massive 95.2% growth, followed by the Middle East & Africa (7.9%), Asia Pacific (7.5%), and Latin America (6.8%). This robust performance in emerging economies provided a strong counterbalance to the cautious spending environment in some developed markets.
Workforce Stability and Shareholder Payout
In a period marked by industry-wide discussions on workforce restructuring, TCS demonstrated stability and continued growth in its employee base. The company’s workforce stood at 612,724 as of September 30, with a net addition of 5,726 employees during the quarter. The net headcount addition for the first half of the fiscal year crossed 11,000 employees. Furthermore, the company reported a last twelve months (LTM) IT services attrition rate of 12.3%, reflecting its strong talent retention.
Reaffirming its commitment to shareholders, the TCS Board has declared a second interim dividend of ₹10.00 per equity share. The record date for the dividend is set for October 18, 2024, and the payment will be made on November 5, 2024.
TCS Q2 2025 Highlights: Future Outlook on AI and Digital Transformation
Future Outlook: AI and Digital Transformation
Looking ahead, TCS continues to see strong momentum in the adoption of Artificial Intelligence and Generative AI. The company reported over 600 AI/GenAI engagements that are either successfully deployed or in various phases of development. Clients are increasingly focused on integrating AI across their entire enterprise value chain, moving beyond isolated use cases.
Growth during the quarter was also led by services in Cyber Security and AI.Cloud, as clients prioritized initiatives to modernize their digital core, improve security posture, and accelerate customer acquisition. Despite the challenging macroeconomic environment, TCS’s Q2 results underscore a resilient business model and a strategic focus on high-growth areas that position it to navigate future uncertainties effectively.