BENGALURU :Tata Consultancy Services, India’s top software-services exporter, beat second-quarter revenue estimates on Thursday, aided by strength in its banking, financial services and insurance segment despite U.S. tariff-related uncertainty.
The results boosted optimism around the country’s $283 billion IT sector, which has been dealing with cautious client spending amid economic uncertainties, especially in North America, its largest market.
“If there are no more tariff-related surprises, Indian IT should slowly recover from this quarter,” Centrum Broking analyst Piyush Pandey told Reuters, noting that TCS’s revenue and operating margins were above his expectations.
TCS’s consolidated sales in the July-September quarter rose 2.4 per cent to 657.99 billion rupees ($7.4 billion), beating analysts’ average estimate of 650.86 billion rupees, according to data compiled by LSEG.
Revenue at its core banking, financial services and insurance segment, which accounts for about a third of the company’s business, rose 1 per cent, while revenue from its consumer, healthcare and manufacturing verticals fell 2.9 per cent, 2.2 per cent and 1.1 per cent, respectively.
Profit rose 1.4 per cent to 120.75 billion rupees, but missed analysts’ average estimate of 126.29 billion rupees, hurt by restructuring costs. In July, TCS announced its plans to shed 2 per cent of its workforce in fiscal 2026, affecting about 12,200 middle and senior management jobs. Its employee count fell by 19,755 since last quarter.
TCS’s total order bookings stood at $10 billion during the second quarter, versus $9.4 billion in the first quarter and $8.6 billion in the year-ago period, bringing some cheer to the sector that has been facing many challenges, including a proposed 25 per cent tax on outsourcing payments and an H-1B visa crackdown that is expected to upend the industry’s playbook.
The company also said it would set up a new business entity to build AI infrastructure, including a 1 GW data centre in India.
TCS shares closed 1.1 per cent higher ahead of the results.
($1 = 88.7910 Indian rupees)
