Both IT giants, TCS and Infosys, reported almost similar quarterly earnings, with revenue rising 11 per cent. TCS reported revenue of Rs 73,188 crore (up 11.2 per cent) and Infosys Rs 49,244 crore (up 10.7 per cent). But that growth is mostly due to the weak rupee, as constant currency growth shows TCS grew 2.8 per cent and Infosys 1.5 per cent.
TCS Vs Infosys: Net profit
TCS reported revenue of Rs 73,188 crore, or $7,642 million (up 11.2 per cent YoY and 1.3 per cent QoQ). Infosys reported Rs 49,244 crore (up 10.7% YoY and 2.1% QoQ), or $5,145 million. The rupee’s weakness drove most of the revenue growth. In constant currency terms, TCS grew 2.8 per cent YoY and Infosys 1.5 per cent. Infosys’s 1.2 per cent of sequential growth included about 0.4 per cent from acquisitions.
TCS’s operating margin is 24 per cent, flat QoQ and down 120 basis points YoY. Other expenses rose to 15.2 per cent of revenue from 12.5 per cent. On the other hand, Infosys held 21 per cent, flat YoY. Net margins are 19 per cent for TCS and 15.9 per cent for Infosys.
TCS Vs Infosys: Deal wins
TCS reports $3.1 billion annualised AI revenue, above 10 per cent of revenue, up from $2.6 billion. Infosys reported 10.5 per cent of revenue, up from 8.2 per cent in Q1, which is a 29 per cent sequential rise. The definitions differ, but both now have nearly 10 per cent of their revenue coming in from AI deals, and both are growing far faster than total revenue.
TCS gives no guidance, so investors must read the tea leaves themselves, while Infosys cut FY27’s revenue growth to 1–2 per cent in constant currency from 1.5–3 per cent and retained its 20–22 per cent margin range. Its H1 growth was 1.9 per cent.
TCS Vs Infosys: Attrition
TCS has 598,056 employees and attrition stood at 13.3 per cent, after adding 4,258 in the quarter. In comparison, Infosys has 332,542 employees, essentially flat YoY, and attrition narrowed to 12.7 per cent against 14.3 per cent a year ago. Infosys utilisation is 85.4 per cent excluding trainees.
TCS Vs Infosys: Cash flow
TCS’s operating cash flow stood at 102.2 per cent of net income, and it holds about Rs 54,600 crore in liquid funds. It declared Rs 12 per share. Infosys’s free cash flow was $928 million (which is 113.3 per cent of net profit), but its cash and investments fell to Rs 45,232 crore from Rs 54,809 crore a year ago. It declared an interim dividend of Rs 26 per share.
Nomura cut the price target on Infosys to Rs 1,300 from Rs 1,310, while retaining its ‘Buy’ rating on the stock as the guidance cut was a tad higher than anticipated. Infosys noted there would be some headwinds from amortization for acquisitions, large deal ramp-ups, and AI productivity returns to clients.
“Infosys lowered its revenue growth guidance for FY27, which includes 170 bps unchanged contribution from acquisitions, with the low end of the range assuming further macro deterioration and the top end factoring in improvement in the macro environment,” said Nomura.
After TCS’ results, Motilal Oswal reiterated its ‘Buy’ rating, with a target price of Rs 2,400, implying an upside potential of 16 per cent. The company’s growth outlook remained unchanged, while margins came under pressure. However, international growth picked up. Also, AI-led deflation concerns remained unchanged.
“We expect USD revenue/EPS to compound at 2 per cent and 5 per cent over FY26-28. International growth saw an improvement in Q2FY27, with growth broadening across key geographies and verticals, while deal activity remained stable. Demand is expected to remain selective, with growth likely to be driven by specific pockets as AI adoption continues to shape spending priorities,” said Motilal Oswal.