Tata Consultancy Services (TCS) has reported a steady start to FY27, with its artificial intelligence (AI) business reaching an annualised revenue run rate of $2.6 billion, underscoring the growing role of AI-led transformation in driving enterprise technology investments.

The IT services giant posted revenue of $7.62 billion for the first quarter ended June 30, 2026, remaining flat sequentially while growing 2.7 per cent year-on-year in US dollar terms. On a constant currency basis, revenue increased 0.4 per cent quarter-on-quarter. The company reported an operating margin of 24 per cent and a net margin of 19.2 per cent, excluding exceptional items.

"Q1 FY27 reflects continued growth momentum and the strength of our strategic positioning, despite geopolitical and macroeconomic headwinds," said K Krithivasan, Chief Executive Officer and Managing Director, TCS. "We delivered a strong order book of $9.5 billion, including a marquee AI-led transformation deal with SKF, while continuing to add clients across key revenue bands and scaling our AI business to a $2.6 billion annualised revenue run rate."

He added that as enterprises accelerate investments in AI, application modernisation, cybersecurity, sovereign cloud and platform simplification, TCS' expanding ecosystem partnerships and strong deal conversion capabilities position the company for sustained growth.

The company reported a Total Contract Value (TCV) of $9.5 billion during the quarter, supported by several strategic wins. These included an $800 million AI-led transformation deal with SKF, a multi-million-dollar strategic partnership with ServiceNow, and another multi-million-dollar engagement with a Europe-based Fortune Global 50 enterprise.

The results indicate that AI continues to be a key growth engine for TCS, with enterprises increasingly prioritising AI-powered business transformation initiatives alongside digital modernisation programmes. The company has been strengthening its AI portfolio through investments in generative AI, intelligent automation, cloud services and strategic technology partnerships to address growing customer demand.

TCS generated net cash from operations of $1.31 billion, equivalent to 93 per cent of net income, while maintaining a workforce of 593,798 employees. The company's IT services attrition stood at 13.6 per cent on a last twelve months (LTM) basis.

The Board has declared an interim dividend of ₹12 per share, with July 15, 2026, as the record date and July 31, 2026, as the payment date.