Tata Consultancy Services extended its rally to more than 6% on Friday as investors welcomed stable profitability, accelerating artificial intelligence revenue and improving international business in the company’s September-quarter results.

TCS shares climbed as much as 6.2% to ₹2,204, making the company one of the strongest performers on the Nifty 50 and driving a broader advance across Indian technology stocks. The Nifty IT index gained more than 3% as the results eased some concerns about weak global technology spending and disruption from generative AI.

The rally followed TCS’s financial results for the second quarter of FY2026-27. Revenue reached $7.64 billion, rising 0.2% from the previous quarter in dollar terms and 2.4% from a year earlier. In constant currency, revenue increased 0.5% sequentially, while international business grew 1.2%.

Investors focused particularly on the company’s ability to protect profitability while increasing spending on artificial intelligence, acquisitions and specialised talent. TCS maintained its operating margin at 24%, unchanged from the preceding quarter, while its net margin stood at 19%. Net cash generated from operations reached $1.48 billion, equivalent to 102.2% of net income.

AI has become both the biggest opportunity and a major source of uncertainty for India’s technology-services industry. Automation threatens parts of the traditional model built around large workforces and billable hours, but it is also generating demand for data modernisation, AI integration and autonomous enterprise systems.

TCS said its annualised AI revenue reached $3.1 billion during the quarter, crossing 10% of total revenue and rising by nearly 20% sequentially. The figure strengthened expectations that AI-related work can become a meaningful revenue stream rather than simply adding to investment costs.

Growth was led by banking, financial services and insurance, manufacturing, and technology and services. These businesses recorded sequential constant-currency growth of 2.5%, 3.1% and 3.1%, respectively. The company also reported $9.6 billion in total contract value and highlighted strategic agreements involving Porsche and Best Buy.

The board declared a second interim dividend of ₹12 per share. October 14 has been set as the record date, with payment scheduled for October 30.

The positive results also helped investors look past the US decision to suspend TCS and several other technology companies from the Permanent Labor Certification programme. The PERM process allows employers to sponsor eligible foreign workers for employment-based permanent residence.

In a statement submitted to the stock exchanges, TCS said the suspension would not materially affect its workforce strategy or customer relationships because it submitted fewer than 10 PERM applications in each of the past two years. The company operates through 31 offices and delivery centres in the United States and plans to recruit another 15,000 people there over the next five years, primarily through local hiring.

TCS remained about 30% lower in 2026 following concerns over subdued discretionary technology spending, AI-led pricing pressure and slowing growth in important client industries. Consumer-business revenue declined sequentially during the latest quarter, while revenue from India fell sharply after an unusually strong previous period.

Friday’s move therefore reflects relief as much as renewed confidence. Investors received evidence that TCS can preserve margins, expand international business and convert AI demand into revenue despite a difficult operating environment. Sustaining the recovery will now depend on stronger revenue growth, continued deal conversion and proof that expanding AI work can offset pressure on traditional outsourcing services.