TCS Q2 FY27: consol. PAT ₹13,934 Cr, +15% YoY (adj. ~7%); margin misses 25%+ guidance

TCS reported consolidated revenue of ₹73,188 Cr (+11.2% YoY, +1.3% QoQ) and PAT of ₹13,934 Cr (+14.9% YoY, +3.8% QoQ) for Q2 FY27, with basic EPS at ₹38.37 versus ₹36.90 last quarter and ₹33.37 a year ago. Standalone PAT came in at ₹14,104 Cr (EPS ₹38.98). Crucially, this was the only one of the three compared quarters with zero exceptional items — Q1 FY27 carried a ₹668 Cr legal-settlement charge and Q2 FY26 a ₹1,135 Cr restructuring charge — so the headline growth rates overstate the underlying trend. Adjusting both comparison quarters for their one-offs (same effective tax rate applied back), underlying PAT growth is a much more modest +7.3% YoY and roughly flat (+0.1%) QoQ — well below the +11.2% YoY revenue growth, pointing to margin compression rather than operating leverage. Segment-level operating income (ex-exceptionals) works out to ~23.6% of revenue this quarter versus ~24.8% a year ago and ~23.6% last quarter — down ~120 bps YoY and flat sequentially — and still short of the 25%-plus exit-margin target management laid out on the July concall. The effective tax rate was broadly stable at ~25.2% (24.5% a year ago, 25.2% last quarter), so the margin shortfall, not tax, is the swing factor in the adjusted profit growth. Street positioning (Kotak Institutional Equities, pre-result preview) had flagged ~0.5% QoQ constant-currency revenue growth and roughly 100 bps of YoY margin decline with broadly stable sequential margins — directionally this is what played out on margins, though the reported INR revenue growth (+1.3% QoQ, +11.2% YoY) runs hotter than the CC guide, partly a currency effect this filing doesn't disaggregate. No standalone management press release was included in this filing, so management's own framing of the quarter cannot be quoted or reconciled here. Alongside results, the Board declared a second interim dividend of ₹12/share for FY27 (record date October 14, payable October 30), and TCS Netherlands signed a definitive agreement during the quarter to acquire 100% of MHP Management- und IT-Beratung GmbH, an automotive, SAP and manufacturing-digitalization consulting firm, for an enterprise value of EUR 320 million (~₹3,484 Cr) — alongside the previously flagged nominal-value absorption of Best Buy's India capability center. Management had guided to demand "resuming in Q2" after citing near-term geopolitical and macro headwinds on the July call; a QoQ revenue uptick of just 1.3% in INR terms is a tepid confirmation at best. With adjusted margin still short of the 25%-plus exit target and the MHP deal yet to close, the next quarter's margin trajectory and the pace of any demand recovery are the key markers to track.