Financial Performance Summary

Revenue Performance:

  • Q2 FY27 revenue: USD 1.235 billion
  • Sequential growth: 1.1% QoQ
  • Year-over-year growth: 5.1% in constant currency terms (4.7% in USD terms)
  • Revenue in INR: ₹11,808 Crores, representing 1.7% QoQ and 13.6% YoY growth

Profitability Metrics:

  • EBIT margin: 15.6%, representing a 10 basis point sequential improvement
  • PAT margin: 11.7% (down from 12.7% in Q1 due to one-time gain recognition in previous quarter)
  • Effective tax rate: 25.8% (unchanged from Q1)
  • Basic EPS: ₹47.2 for the quarter (compared to ₹49.5 in Q1)

Cash Flow & Balance Sheet:

  • Operating cash flow to PAT ratio: 39% (down from 79% in Q1 due to advance payments and gratuity provision funding)
  • Free cash flow to PAT ratio: 24% (compared to 63% in Q1)
  • Cash and investment balances: USD 1.6 billion or ₹15,300 Crores (vs ₹15,021 Crores in Q1)
  • Return on capital employed: 28.5% (vs 29.8% last quarter)
  • Total DSO: 84 days (improved by 1 day from 85 days last quarter)

Operational Highlights

Headcount & Utilization:

  • Total headcount: 88,835 (net addition of 949 employees sequentially)
  • Fresher additions: 1,743 for the quarter
  • Utilization excluding trainees: 86.4% (flat sequentially)
  • Trailing 12-month attrition: 13.3% (stable)

AI Business Performance:

  • AI revenue reached 13.4% of overall revenue
  • 40% year-over-year growth in AI revenue
  • Cumulative AI revenue including enterprise AI grew 47% year-over-year
  • AI 1,000 program on track with nearly 1,000 employees in mentor-led journeys
  • 2,000+ certifications across Claude, Gemini, Copilot, and Azure AI

Order Inflow & Pipeline:

  • Order inflow: USD 1.3 billion
  • Pipeline described as "healthy" including large deals
  • Added financial services client to USD 100 million-plus client category

Business Segment Performance (Constant Currency)

Industry Segments:

  • Financial Services: 3.1% sequential growth, 0.4% YoY growth (returned to growth)
  • Tech and Services: 7% YoY growth, -4% sequential (seasonal movements)
  • Consumer: 0.3% sequential growth, 8.6% YoY growth
  • Production: 3.7% sequential growth, 7.4% YoY growth (Manufacturing and Energy/Utility)

Geographic Performance:

  • Americas: 1.5% sequential growth
  • Europe: 1% sequential growth
  • Rest of World: -1.4% sequential decline (due to Middle East revenue impact)

Strategic Initiatives & Capability Development

BlueVerse™ Ecosystem Enhancements:

  • Launched BlueVerse™ OneToken: Workload routing and governance layer
  • Introduced BlueVerse™ RightLogic: Cybersecurity assessment framework
  • Created BlueVerse™ SovereignSphere™ Models: Domain-trained AI models
  • Developed three new domain-specific small language models (SLMs)
  • Granted six AI patents

Partner Ecosystem Developments:

  • Fully embedded Claude and Claude Code into BlueVerse™ AI delivery fabric
  • Partnered with Glean for enterprise knowledge layer integration
  • Partnered with Cognition to bring Devin software engineering agent
  • Collaborated with IBM and Red Hat for Project Lightwell vulnerability discovery
  • Collaborated with Chainguard for software supply chain security

Facility Expansion:

  • Opened new Global Delivery and AI Competency Center in Kolkata
  • Expanded BlueVerse™ Studio footprint to Hyderabad

Notable Deal Wins

  • Selected by global banking institution as strategic technology partner for wealth and personal banking services
  • Selected by North American specialty construction company to build AI-led operating model
  • Selected by US insurance company as strategic partner to consolidate global IT services and embed AI
  • Expanded relationship with large US property and casualty insurer as AI-led engineering partner
  • Selected by leading CPG player to support marketers in concept-to-creative process transformation
  • Selected by global music entertainment company to implement AI-enabled financial planning platform

Proof Points of AI Delivery

Enterprise AI:

  • Developed agentic recovery platform for global media company achieving 100% classification accuracy
  • Deployed 12 specialized AI agents for European PayTech company, reducing delivery cycle time by 50%

Business AI:

  • Building intelligent retirement solutions for investment management company
  • Deployed AI-powered HR agent for global petrochemical leader, potential 40% HR ticket reduction

Marketing AI:

  • Enabled AI-powered content generation for global food service business, 50% productivity gains
  • Redesigned checkout experience for home-improvement retailer, improving purchase time

Industrial AI:

  • Deployed AI-powered predictive maintenance for automotive manufacturer, reducing downtime
  • Deployed agentic AI-based digital twins for environmental services company, 50% manual effort reduction

Corporate Actions

Dividend Declaration:

  • Board approved interim dividend of ₹25 per equity share
  • Represents 13.6% increase from corresponding quarter of previous year

M&A Activity:

  • Acquisition of certain Randstad digital businesses in Europe and Australia
  • Approval process on track, expected to receive all approvals in Q3 FY27

ESG Performance

  • Achieved ESG leadership status with score of 76 from NSE Sustainability Ratings and Analytics Limited
  • Rated in leadership category by SES ESG Research with score of 77.3
  • Among top performing Indian companies by market capitalization

Management Outlook

  • Expect stronger sequential growth in H2 FY27 compared to H1
  • Delivered 5.4% year-over-year growth in H1 FY27
  • AI adoption accelerating with growing demand across AI stack
  • Confident about growth momentum acceleration due to client confidence and AI pivot
  • Randstad acquisition expected to close in Q3 with market realignment in subsequent months

Risk Factors & Challenges

  • Middle East business impact affecting Rest of World segment performance
  • Hardware pricing and delivery time challenges affecting CBDT deal ramp-up
  • Traditional services facing pricing pressure while AI services command premium
  • Ongoing macroeconomic conditions affecting decision-making timelines