TCS Opens Q2 as Mid-Cap IT Keeps the Growth

Tata Consultancy Services reports Q2 FY27 results on October 8, seven days after Accenture beat its own range and still guided for thin organic growth. A street poll this week puts TCS at 0.5% quarter-on-quarter in constant currency. Persistent Systems is seen at 6.7%.

The September-quarter season is a split. Large-cap Indian IT is walking in as a cash-return story. Mid-caps still have the growth.

Accenture’s October 1 Print Left Organic Growth Thin

Accenture’s October 1 release put fourth-quarter revenue above its guided range, at $18.7 billion. That was 6% in dollars and 7% in local currency, against a guided band of $17.75 billion to $18.40 billion.

ACCENTURE’S OCTOBER 1 SCORECARD

• Full-year sales: Fiscal 2026 closed at $74.2 billion, up $4.5 billion, or 6% in dollars and 5% in local currency.
• New bookings: $22.2 billion in the quarter, up 4% in dollars and 5% in local currency, and $84.5 billion for the year.
• FY27 sales guide: 3% to 6% in local currency, with about 2% to 2.5% of that band from deals already bought.
• Cash returned: A record $11.5 billion in fiscal 2026, with at least $9.5 billion planned for fiscal 2027.

Managed services bookings were a record $12.77 billion, with a book-to-bill of 1.4. Consulting bookings were $9.40 billion, with a book-to-bill of 1.0. Clients are still signing work to run systems more cheaply. They are slower to pay for new build-outs, which is the work that used to lift Indian billing rates.

We continue to believe the opportunities related to AI are greater than the impact of AI-related efficiencies in our business, and we expect that to continue as AI enables enterprises to do much more.

Julie Sweet, Chair and CEO, Accenture, on the fiscal 2026 results call

The stock jumped as much as 22% in U.S. trading. Infosys ADRs rose 8.09% to $11.63, and Wipro ADRs rose 7.88% to $1.78. Indian cash markets were shut on October 2 for Gandhi Jayanti, so that pop reaches Dalal Street on October 5. Nuvama Research called the print slightly positive for Indian IT and still said a near-term recovery is not the base case. Pareekh Jain, founder of EIIR Trend, said Indian firms sound more hopeful on the next 12 months than on this quarter, and that the second half should beat the first if Accenture’s mix holds.

Large Caps Face Their Weakest Sequential Print in Three Years

Street estimates compiled this week put large-cap quarter-on-quarter constant-currency growth at the weakest in three years. Demand has not broken down since the June quarter. It has not turned either.

Kotak Institutional Equities called the quarter muted for tier-1 firms and blamed AI-led price cuts, plus a softer macro, in a season that is usually the year’s strongest. Its own large-cap stack has HCLTech at 2% quarter on quarter, Infosys at 1.1% and TCS at 0.5%.

STREET POLL FOR Q2 FY27 SEQUENTIAL GROWTH

TCS is the one that sets the tone, and it is coming off a flat dollar quarter. The company reported US$7,624 million in June-quarter revenue, unchanged quarter on quarter, up 2.7% in dollars and 0.4% in constant currency. Operating margin was 24.0%. The order book was $9.5 billion. Annualised AI revenue reached $2.6 billion, up 13.6% quarter on quarter, while headcount stood at 593,798 and IT-services attrition at 13.6%.

HCLTech’s June quarter fell 0.5% in constant currency. Its full-year constant-currency guide is still 1% to 4%, and some desks think the reported band could move to 3% to 4% once Jaspersoft and HPE Telco Solutions are counted. Wipro is the soft print in the poll, and some desks already have it guiding minus 2% to 0% for the December quarter.

Persistent, Coforge and Mphasis Still Have the Growth

The same poll has mid-tier firms far ahead of the majors, helped by share gains in a few verticals and by large deals that are now ramping. Persistent’s 6.7% rests on a $650 million-plus mega-deal coming online. That kind of step-up can look like a structural win until it annualises, so one lumpy quarter is not the same as a lasting shift in wallet share.

Bought revenue is doing a lot of the reported work, which is why the organic column in that table matters more than the headline.

HOW BOUGHT REVENUE IS PADDING THE PRINTS

• Coforge: About 820 basis points from Encora, which is why 4% organic can read as 12.2% reported.
• HCLTech: About 110 basis points from Jaspersoft and HPE Telco Solutions, per Kotak.
• Wipro: About 80 basis points from Mindsprint and AlphaNet.
• Infosys: About 50 basis points from a full quarter of Optimum Healthcare.
• Mphasis: About 50 basis points from Red Oak, on top of a BFSI ramp some desks put at 3% to 3.5% organic.

Kotak’s preferred names into the season are Tech Mahindra, Coforge, Sagility and Indegene. Tech Mahindra is the hybrid in the large-cap group that still looks like a growth tape, after June-quarter constant-currency revenue rose 2.6% quarter on quarter and 6.6% year on year, with new deal wins of US$1,078 million, up 33.3% year on year. EBIT margin was 14.4%. Headcount was 146,760. Orange and other large wins are in the run-rate; a Pininfarina programme that delivered in the first quarter is the offset.

When TCS, Infosys and Wipro Report Q2 FY27

TCS reports on October 8 after a board meeting, with the earnings call at 7:00 p.m. IST and a second interim dividend on the agenda. HCLTech follows on October 12. Wipro and Tech Mahindra land on October 15, Infosys and Coforge on October 23, and Mphasis on November 5.

Q2 FY27 IT RESULTS CALENDAR

TCS told the exchanges on September 22 that the October 8 board will take audited standalone and consolidated results for the quarter and half-year ended September 30, 2026. HCLTech’s notice went out on September 17, Infosys on September 15, and Coforge on September 9. Tech Mahindra’s board sits on October 15 and October 16, with results due on the 15th. Its trading window stays shut through October 17 and reopens on October 18.

Dividends and Tech Mahindra’s First Bonus Since 2015

While the growth tape is thin, boards are still lining up cash and paper for holders. TCS will consider a second interim dividend, with October 14 fixed as the record date. It already paid ₹12 a share in July, with a July 15 record date and a July 31 pay date. HCLTech will consider a third interim after ₹24 in April and ₹12 in July. Infosys and LTTS have interims on the agenda too.

Tech Mahindra is the outlier. The board will consider an interim dividend and a bonus-share issue together, the first bonus proposal since March 2015, when holders got one extra share for every share they held and the ₹10 face value was split into two ₹5 shares. The ratio this time has not been disclosed. In July the company paid ₹36 a share, its highest dividend on record. Over the past three years it has paid ₹168 a share, including ₹15 interims in October 2025 and October 2024.

As of the June shareholding pattern, 7.1 lakh small retail holders (stakes up to ₹2 lakh) owned 6.18%. Mutual funds held 19.14%, LIC 11.1%, and foreign portfolio investors 18.66%. For those retail names, October 15 is a payout meeting as much as an earnings meeting. That is the large-cap bargain in this cycle: if the core book cannot grow much, the cheque still can.

Infosys Guidance on October 23 Will Settle the Year

TCS starts the tape. Infosys writes the year. In July the company cut FY27 growth guidance of 1.5% to 3.0% in constant currency, from 1.5% to 3.5%, and kept operating-margin guidance at 20% to 22%. About 170 basis points of that sales band is from firms it already bought, so the organic low end sits close to zero.

June-quarter revenue was $5,082 million, up 1.0% quarter on quarter and 2.4% year on year in constant currency. The Infosys Q1 operating margin of 21.1% held inside the band. Large-deal TCV was $3.6 billion, with 61% net new. AI work was 8.2% of revenue. Rupee revenue was ₹48,211 crore, and net profit was ₹7,769 crore.

Desks now argue about a further cut, to 1% to 2% or 1.5% to 2.5%, after a European auto client ramped down and volume conversion stayed slow. HCLTech is expected to keep its organic midpoint near 2.5% even if the reported range tightens. That is why October 23 matters more than October 8 for anyone trying to underwrite the full year. A TCS beat without an Infosys guide hold still leaves FY27 as a bought-growth year.

Clients Are Paying Less for the Same Hours

The Nifty IT index last closed on October 1 at 28,304.70, up 2.17% on the session, after a 16.52% drop over one year and a 52-week high of 40,301.40. The bounce is relief after Accenture, not a rewrite of the Indian estimates. The fear that has hung over the sector all year is simpler than a demand collapse: AI does the same work in fewer hours, so buyers ask for a lower bill on the old book, and the new AI book is not yet large enough to offset that cut.

TCS’s $2.6 billion AI run-rate is growing fast and is still a slice of a $7,624 million quarter. Infosys is at 8.2% of sales. If the rest of the book is being repriced down, AI has to grow several times faster than the core just to keep total revenue flat. That is the arithmetic the October calls have to answer, in plain numbers rather than slide titles.

WHAT THE OCTOBER CALLS WILL BE GRADED ON

• Organic vs bought: Constant-currency growth with acquisitions stripped out, especially at Infosys, HCLTech, Coforge and Wipro.

AI mix: AI as a share of revenue, and whether the non-AI book is still shrinking in dollars.

• Deal quality: Large-deal TCV versus conversion, and how much of the book is vendor consolidation that cuts the client’s IT spend.
• People: Headcount, attrition, utilisation, and the wage hike Infosys said would cover most staff from October.

The cash market’s first session to price the Accenture pop is Monday, October 5. TCS speaks three days later. Infosys then has 15 days after that to say whether FY27 is a recovery year or a year of cheques, bonuses and bought revenue.

Disclaimer: This article is news reporting and analysis of scheduled earnings, dividends and market estimates. It is for information only and is not investment advice, a research recommendation, or an offer to buy or sell any share, ADR, index future or other security. Readers should consult a SEBI-registered investment adviser or a qualified financial planner who knows their goals, time horizon and risk limit before acting on any date, poll figure or payout item in this piece. Company results, dividend amounts, bonus ratios, guidance ranges and index levels can change when boards meet and when later filings replace the notices cited here.