• AI deal momentum: TCS secured a major net-new AI-led transformation deal with SKF and saw AI revenue grow 13% quarter-on-quarter. AI penetration is deep, with active AI engagements across 130 of its 139 largest clients generating over $50 million in annual revenue.
• AI revenue deflation: AI-driven productivity gains are leading to top-line deflation of around 10–15% on large project renewals, though management expects this short-term pressure to be outweighed by new transformation projects by FY28.
• FY27 growth outlook: While airlines, retail, and communications face macro stress, banking and tech services are gaining traction; management reiterated that full-year FY27 performance will outpace FY26.
• Margin and hiring: Operating margin stood at 24% after absorbing a 170-basis-point impact from global wage hikes, which was partially offset by a 30-basis-point currency benefit and productivity gains. Future hiring will remain concentrated on niche AI skills.