Tata Consultancy Services reported Q2 FY27 revenue of ₹73,188 crore, up 11.2% year-on-year (YoY) and 1.3% quarter-on-quarter (QoQ). In constant currency terms, growth was a modest 0.5% QoQ, with international revenue rising 1.2%. The BFSI, Manufacturing, and Technology & Services segments were the engines, growing 2.5%, 3.1%, and 3.1% QoQ in constant currency, respectively.
Here’s the thing: the headline 11% YoY revenue jump wasn’t driven by the flashy Porsche and Best Buy deals announced during the quarter. Those are strategic bets on the future, not immediate revenue drivers. The five-year partnership with Porsche AG and the acquisition of its consulting subsidiary, MHP, for €320 million (about ₹3,600 crore), is about building an AI-led automotive platform. Similarly, transitioning Best Buy’s India Global Capability Centre into an AI Capability Center is a play to scale AI services. These deals represent a new category of transformation partnerships, but their financial impact will unfold over years, not quarters.
What did drive the quarter? Operational discipline. TCS maintained an operating margin of 24.0% while net profit grew 14.9% YoY to ₹13,884 crore. Net cash from operations hit ₹14,190 crore, a staggering 102.2% of net income, indicating exceptional working capital management. The company also declared a second interim dividend of ₹12 per share, continuing a pattern of generous shareholder returns.
Artificial Intelligence is becoming a material part of the story. Annualized AI revenue crossed $3.1 billion, now accounting for over 10% of total revenue. This milestone, combined with a patent portfolio of 10,044 applications (including 2,176 AI-led inventions), signals TCS’s intent to move up the value chain from traditional IT services to AI-led transformation. However, the market’s reaction was muted—the stock ended flat at ₹2,076—suggesting investors are still waiting for evidence that AI can drive faster growth before it rewards the stock further.
The housing market is seeing a sharp bifurcation, and luxury is where the action is. Keystone Realtors (Rustomjee) reported its highest-ever quarterly pre-sales of ₹1,423 crore, an 84% YoY surge. Management attributed this to “exceptional demand for our Luxury and Super premium projects”. This isn’t a fluke; the company is strategically tilting its portfolio towards premium and super-premium projects, a move that is clearly paying off. Other +1
Embassy Developments took it a step further with an 8-fold jump in pre-sales to approximately ₹3,225 crore. The company launched three premium projects with a combined gross development value (GDV) of ₹7,500 crore, including a record single-home transaction of about ₹711 crore in Mumbai’s Juhu area. This underscores a broader trend: high-net-worth individuals are buying, and they prefer developers with a proven track record. Other +2
However, investors should remember that pre-sales are not revenue. Both companies recognize revenue upon project completion, which means this booking bonanza will convert to revenue over the next 2-3 years. For now, the focus is on execution. Keystone’s gross debt-to-equity stands at a comfortable 0.3x, while Embassy is managing a net debt-to-equity of 0.35x and plans to refinance its high-cost debt (around 14.8%) as project cash flows improve. The record sales boost confidence, but free cash flow will depend on how efficiently they convert these bookings into collections. Transcript +2
Muthoot Microfin is quietly executing a strong turnaround. Assets under management (AUM) grew 22% YoY to ₹15,323 crore, driven by a 28% jump in disbursements to ₹2,900 crore. A key enabler has been the decline in the cost of funds to 9.93%, the first time it has entered single-digit territory. This directly improves net interest margins and profitability.
The company is also reducing its dependence on joint liability group (JLG) loans, which carry higher group-lending risk. The portfolio mix has shifted from 83:17 (JLG to non-JLG) in March 2026 to 69:31 by September 2026. This diversification, coupled with a focus on individual loans and gold loans, is improving resilience. Collection efficiency strengthened to 98.11%, up 477 basis points YoY, while the SME individual loan portfolio maintains near-zero delinquency.
Digital adoption is playing a crucial role. Digital collections rose to 47% in Q2 FY27 from 25% a year ago. This not only improves operational efficiency but also helps control customer acquisition costs over time. Despite these positives, the stock gave up early gains to trade flat, reflecting broader market caution on the microfinance sector.
The industrial sector presented a mixed picture. JSW Steel reported a 5% YoY increase in consolidated crude steel production to 7.27 million tonnes, with capacity utilization at Indian operations reaching 88%. This ramp-up, aided by the restart of Blast Furnace 3 at Vijayanagar, should support better cost efficiency through economies of scale.
Steel Exchange India was a standout performer, with provisional Q2 FY27 revenue jumping approximately 45% YoY to ₹340 crore. This was driven by record re-bar production of 69,465 metric tonnes, supported by the operationalization of a new Reheating Furnace (RHF) that improved manufacturing yields and capacity utilization.
In contrast, GM Breweries saw its stock slump nearly 10% despite reporting a 12% YoY increase in profit after tax to ₹39.29 crore. The disconnect highlights market sensitivity to margins. Reports suggest the EBITDA margin may have dropped 150 basis points YoY due to higher input, inventory, and excise duty costs. For a stock that had already run up, a margin squeeze, even alongside profit growth, was enough to trigger a sell-off. It’s a reminder that in FMCG and beverages, quality of earnings matters as much as the headline profit number.
As we look to the second half of FY27, the themes are clear. TCS needs to convert its AI investments and strategic deals into faster revenue growth to satisfy a demanding market. Real estate developers must execute on their massive luxury pipelines to convert pre-sales into cash and reduce debt. Muthoot Microfin’s strategy of diversification and digital efficiency appears sound, but it must navigate a competitive lending landscape. Meanwhile, the divergence in the steel and beverages sectors underscores the importance of operational efficiency and cost control in a volatile macro environment. The market may be down, but for companies executing well on their specific strategies, opportunities remain.
