TCS AI engine powers 15% rise in Q2 profit

Bengaluru: India’s largest IT services company, Tata Consultancy Services posted largely inline second quarter results with sound improvement in its AI revenue. In the second quarter ended September, TCS reported a net profit of Rs 13,884 crore, an increase of 15 per cent over the corresponding period of last fiscal year. Its consolidated revenue stood at Rs 73,188 crore, which was a rise of 11.2 per cent year-on-year basis. In constant currency term, the Mumbai-headquartered company reported a revenue growth of 0.5 per cent quarter-on-quarter basis. The company reported an operating profit of Rs 17,553 crore during the September quarter. Its operating margin stood at 24 percent, which remained flat as compared with the previous quarter. Its net profit margin stood at 19 percent during this period.

Deal pipeline of the company remained healthy as TCS’ total contract value (TCV) stood at $9.6 billion as compared to $9.5 billion reported in the previous quarter. A year ago, the company’s TCV was at $10 billion.

“We are pleased with the broad-based growth in all our international markets and most industry segments. This quarter we announced two unique deals with Porsche and Best Buy which represent a new category of transformation partnerships,” K Krithivasan, CEO of TCS said.

During the September quarter, company’s annualised artificial intelligence (AI) revenue run rate came at $3.1 billion, up from $2.6 billion reported in the previous quarter. At $3.1 billion AI revenue, the company now earns more than 10 per cent of the company’s overall revenue from the AI segment.

“AI momentum remained strong, with annualized AI revenues now exceeding $3 billion.