TCS Reports Q1 Revenue Beat and Scales AI Business

Tata Consultancy Services reported a consolidated net profit of Rs 13,349 crore and revenue of Rs 72,275 crore for the first quarter of FY27. While revenue exceeded estimates due to growth in the U.S. market and the banking, financial services, and insurance vertical, net profit rose only 4.6% year-on-year. This profit figure includes a one-time settlement charge of Rs 668 crore following the U.S. Supreme Court's rejection of a trade secrets lawsuit appeal involving DXC Technology.

The company scaled its artificial intelligence business to an annualized revenue run rate of $2.6 billion, supported by partnerships with Anthropic and Mistral AI and an $800 million contract with SKF. CEO K. Krithivasan characterized AI revenue as non-recurring and lumpy, noting that most projects are short-term engagements. Despite this, he dismissed concerns that AI would lead to a drastic reduction in white-collar employment, contradicting previous suggestions from Chairman N. Chandrasekaran.

TCS added 9,279 employees during the quarter, its strongest net headcount addition in over a year, bringing the total workforce to 593,798. This growth follows significant workforce reductions in late 2025. The company also completed global annual salary increments and reported a 12-month attrition rate of 13.6%. Investors responded positively to the revenue beat and AI momentum, with shares rising between 3% and 4%. The board declared an interim dividend of Rs 12 per equity share.