TCS reported strong Q2FY27 results that marginally surpassed market expectations, with consolidated net profit reaching ₹13,884 crore, registering a 14.45% year-on-year increase from ₹12,131 crore in the corresponding quarter last year. On a sequential basis, net profit rose 3.45% from ₹13,420 crore in the previous quarter. The company's revenue for Q2FY27 stood at ₹73,188 crore, marking an 11.20% year-on-year growth in rupee terms and a 1.3% increase over the June 2026 quarter. According to Mint, TCS reported a total contract value (TCV) of $9.6 billion during the quarter, with key developments including a five-year strategic partnership with Porsche AG, the acquisition of MHP, and an agreement to transition Best Buy's Global Capability Centre in India to TCS and transform it into an AI Capability Centre (AICC). The company also declared a dividend of ₹12 per share alongside its quarterly results.
Indian IT stocks are in focus today due to significant developments in the H-1B visa program, with the US Labor Department announcing major restrictions on Thursday evening. The Labor Department suspended Microsoft and Adobe from the Permanent Labor Certification Program due to multiple active Federal investigations, and will not accept or process any new applications from companies like Cognizant, Infosys, Capgemini, Wipro, TCS and HCLTech. However, IT industry body NASSCOM responded that Indian IT companies have significantly reduced their dependence on the H-1B visa and have steadily expanded local hiring to build a strong domestic workforce in the US. The US administration alleges that these IT giants have abused the H-1B visa infrastructure to undercut American wages, pointing to hundreds of thousands of labor certifications secured over the last decade. As per Mint, Anuj Gupta, SEBI Registered Research Analyst, believes this development is negative for IT stocks, as it could put pressure on margins and weigh on revenue growth going forward, noting that major Indian IT companies derive more than 50% of their revenue from the US market, making them particularly vulnerable to any slowdown in technology spending or changes in demand from American clients.
IT stocks surged up to 3% on Thursday, leading market gains despite weak overall sentiment, as investors turned their attention to TCS, which is set to kick off the Q2 earnings season. According to The Economic Times, Tata Consultancy Services shares jumped around 3%, while heavyweight peers HCLTech and Infosys gained nearly 2% each. Other major IT names including Mphasis, Coforge, LTIMindtree, Tech Mahindra, Persistent Systems and Wipro also posted gains of 1-2%. The Nifty IT index rose nearly 2%, making it the top-performing sectoral index on Thursday, while most other sectoral indices remained in the red. As per CNBC TV18, Mphasis led the gainers with a 3% rise to ₹2,357.30, followed by Coforge at ₹1,870.60 (2.6%), Tech Mahindra at ₹1,525 (2.2%), TCS at ₹2,141.50 (3%), LTIMindtree at ₹3,983 (1.8%), Infosys at ₹1,012.65 (2%), HCL Tech at ₹1,211.80 (2.2%), Persistent Systems at ₹5,629 (2.2%)** and Wipro at ₹162.21 (1.6%)**.
TCS achieved a significant milestone in AI monetization, with its annualized artificial intelligence revenue run rate crossing the $3.1 billion mark, now constituting over ten percent of the company's total revenue stream. As per Mint, Seema Srivastava, Senior Research Analyst at SMC Global Securities, noted that "crucially for long-term equity valuations, the company is successfully monetizing next-generation technologies". The company's total contract value of $9.6 billion secured during the quarter demonstrates strong business momentum and future revenue visibility. However, the inability to offer green card sponsorships threatens onsite talent retention, with companies potentially having to offshore more client projects back to India or hire local American engineers at significantly higher compensation levels, which could inflate operational costs and severely compress future profit margins. The US raised the annual fee for new H-1B visa applicants to $100,000 in September last year, adding to the operational challenges facing Indian IT companies.
While IT stocks gained significantly, the broader equity markets faced pressure due to global factors. According to CNBC TV18, the benchmark NIFTY50 was down 1.1% at 22,357 points, while the BSE SENSEX was down 0.93% at 71,963 points as of noon deals. The weakness was attributed to elevated global bond yields, rebounding crude oil prices, and selling pressure from the Asian markets. However, the Nifty IT index rallied 2.23% to hit a day's high of 28,378.90 points on Thursday, in comparison to 27,757.80 points at the previous equity market close. After touching the day's high, the index retracted some of its intraday gains, trading around 1.1% higher at 28,072 points during the trading session on October 8. The Nifty IT index was the only sectoral index that held out on Thursday for a better part of the session but it too fell prey to the market sell-off towards the close of trade, ending just below the flat line. According to Mint, the Indian IT sector finds itself at the epicenter of a massive tug-of-war, caught between a severe regulatory crackdown in the United States and a spectacular earnings breakout from industry bellwether TCS.
