Both Infosys and Tata Consultancy Services reported modest revenue growth in the September 2026 quarter, as clients remained cautious about technology spending. According to reports from The Financial Express, Infosys reported revenue of $5.145 billion, up 1.2% sequentially and 1.5% year-on-year in constant-currency terms. The company's operating profit increased 1.3% year-on-year to $1.079 billion, while operating margin stood at 21.0%, compared with 21.1% in the June quarter. Net profit declined 2.5% year on year to $817 million. TCS reported revenue of $7.642 billion, up 0.5% sequentially in constant-currency terms and 2.8% year on year, with operating margin at 24.0%. TCS reported net profit of $1.45 billion (₹13,075 crore) for the quarter. However, ET Now reports show that the growth was primarily driven by rupee weakness, with constant-currency growth showing 2.8% for TCS and 1.5% for Infosys.
The modest growth reflects broader challenges in the IT services sector, with demand varying across industries and geographies. As reported by The Financial Express, Infosys reduced its FY27 revenue growth guidance to 1-2% in constant-currency terms from the earlier range of 1.5%-3.0%. The company's revised outlook reflected a weaker-than-expected first half, with softer volumes and lower-than-anticipated price increases affecting revenue growth. Jefferies estimated that the revised range implied organic revenue growth of between -0.7% and 0.4% for FY27, with a 75-basis-point reduction at the midpoint compared with the earlier guidance. TCS does not provide specific revenue guidance, but its September-quarter results showed uneven demand across geographies, with international operations growing 1.2% sequentially while India operations declined 10.0%, which Jefferies attributed to project deferrals. The UK grew 3.5% sequentially, providing support against weaker performance in other markets.
Both companies reported significant progress in securing large contracts, though the metrics differ in their reporting approach. According to The Financial Express, Infosys reported large-deal total contract value (TCV) of $5.2 billion, up 70% year-on-year, with 62% of this being net new business. The company's wins included a seven-year financial-services deal worth more than $2 billion in net-new business, expected to begin ramping up in the fourth quarter, and a separate $1 billion renewal. TCS reported quarterly deal bookings of $9.6 billion, with Jefferies noting that bookings were down 4% year on year when excluding the Porsche and Best Buy deals from the comparison. Infosys has 332,542 employees while TCS has 598,056 employees, reflecting their different operational scales. ET Now reports show that Infosys booked $5.2 billion in Q2, up from $3.6 billion in Q1 and $3.1 billion a year ago, while TCS booked $9.6 billion, against $9.5 billion in Q1 and $10 billion a year ago.
Both companies demonstrated progress in artificial intelligence services, though their reporting methods differ significantly. As reported by The Financial Express, Infosys reported that AI-related revenue accounted for 10.5% of total revenue in the September quarter, up from 8.2% in the June quarter, with AI revenue growing 29% sequentially. The company has described AI as part of its work in software services, modernisation and business transformation. TCS reported annualised AI revenue of $3.1 billion, up 19% sequentially, with annualised AI revenue having crossed 10% of overall revenue. However, the metrics cannot be compared directly due to different reporting approaches. ET Now reports confirm that both companies now have nearly 10% of their revenue coming from AI deals, with both growing far faster than total revenue. Infosys CEO Salil Parekh said the company is advising some of the largest global enterprises on their AI strategy and continues to invest in deep domain and technology capabilities. TCS CFO Samir Seksaria noted that annualised AI revenue reached $3.1 billion and crossed 10% of overall revenue, with demand for AI-led enterprise transformation and AI-native solutions providing opportunities for further work.
Both companies maintained stable operating margins despite challenging market conditions. Infosys reported operating margin of 21.0% in the September quarter, down 10 basis points sequentially, attributed to lower post-sales customer support and incremental acquisition costs, partly offset by currency benefits. The company retained its FY27 operating margin guidance of 20%-22%. TCS reported operating margin of 24.0%, unchanged sequentially but below 25.2% a year earlier, with other expenses rising to 15.2% of revenue from 12.5%. Jefferies identified higher subcontracting costs and overheads as areas of concern for TCS. Infosys delivered free cash flow of $928 million (₹8,898 crore) during the quarter, with CFO Jayesh Sanghrajka noting the company's focus on cost and operational efficiency supported stable margins. TCS reported net profit of $1.45 billion (₹13,075 crore) for the quarter. ET Now reports show that TCS has 598,056 employees with attrition at 13.3% after adding 4,258 employees, while Infosys has 332,542 employees with attrition narrowing to 12.7% from 14.3% a year ago.
Most brokerages maintain cautious stances on both companies, with limited upside expected in the near-term. According to The Financial Express, Jefferies retained a Hold rating on Infosys and reduced its price target to ₹1,140 from ₹1,160, while Motilal Oswal maintained a Buy rating with a target price of ₹1,300. For TCS, Jefferies retained an Underperform rating with a price target of ₹1,800, citing weak bookings and uneven regional demand. The analysts emphasize that neither company's results point to a rapid, broad-based recovery in client spending, with the important test being whether new contracts generate incremental growth rather than simply replacing existing services. Nomura cut Infosys' price target to ₹1,300 from ₹1,310 while retaining its 'Buy' rating, noting that the guidance cut was a tad higher than anticipated, with headwinds expected from amortization for acquisitions, large deal ramp-ups, and AI productivity returns to clients. Motilal Oswal reiterated its 'Buy' rating on TCS with a target price of ₹2,400, implying an upside potential of 16%, expecting USD revenue/EPS to compound at 2% and 5% over FY26-28, with international growth improving and AI adoption continuing to shape spending priorities.
