Ladies and gentlemen, good day and welcome to the TCS earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Nehal Shah from the Investor Relations Team at TCS. Thank you, and over to you. Thank you, operator. Good evening and welcome, everyone. Thank you for joining us today to discuss Tata Consultancy Services' financial results for the second quarter of fiscal year 2026 that ended on September 30, 2025. This call is being webcast through our website, and an archive, including the transcript, will be available on the site for the duration of this quarter. The financial statements, quarterly factsheets, and press releases are also available on our website. Our leadership team is present on this call to discuss our results. We have with us today Mr. K. Krithivasan, Chief Executive Officer and Managing Director. Hi, everyone. Ms. Aarthi Subramanian, Executive Director, President, and Chief Operating Officer. Hi, everyone. Mr. Samir Seksaria, Chief Financial Officer. Hello, everyone. Mr. Sudeep Kunnumal, Chief Human Resources Officer. Hello, everyone. Our management team will give a brief overview of the company's performance, followed by a Q&A session. As you are aware, we don't provide any specific revenue or earnings guidance, and anything said on this call, which reflects our outlook for the future or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risks that the company faces. We have outlined these risks in the second slide of the quarterly factsheet available on our website and emailed out to those who have subscribed to our mailing list. With that, I would like to turn the call over to Krithi. Thank you, Nehal. Good day, everyone. Firstly, I would like to warmly welcome Sudeep Kunnumal, who has taken charge as our CHRO with effect from 1st October. Sudeep brings over three decades of experience encompassing a wide spectrum of areas within human resources, with leadership roles across multiple geographies, business groups, and HR sub-functions. Please join me in wishing Sudeep all the very best in his new role. Thank you. Moving on to Q2 performance, we have delivered a good performance in the backdrop of continued macro challenges. All verticals, except Consumer Business, and all geographies, except United Kingdom, returned to positive sequential growth this quarter. India and emerging markets continue to show strong growth momentum in Q2. In reported currency, our revenue grew 3.7% sequentially and 2.4% year-on-year. Our quarterly revenue grew 0.8% sequentially in constant currency. International revenue growth was at 0.6% quarter-on-quarter in constant currency. We also delivered strong operating margins and free cash flow. We continue to see robust sales momentum this quarter across industries and markets. We are pleased to report a TCV of $10 billion. PFSA TCV was at $3.2 billion, and Consumer Business Group contributed $1.8 billion. North America TCV was $4.3 billion. Our TCV had a sequential increase of 6.5% and a year-on-year growth of 16%. More importantly, this quarter, we announced a significant mega deal with Tryg Insurance, underscoring our continued success in securing large-scale complex engagements and reinforcing our position as a trusted partner, strategic partner for our clients. Our deal pipeline continues to show strong momentum with a healthy mix of cost optimization and transformation deals, as well as services and platform deals across new and existing businesses. Based on client conversations, Q2 revenue growth and TCV, and a strong demand pipeline, we see FY 2026 international revenue growth to be better than last fiscal year. IT services spend is steady, with no significant change expected in the near term. Lingering uncertainties in the broader economic environment continue to remain a key challenge. Companies are keeping a tight control over their discretionary budgets. In response to economic and demand volatility, clients are consolidating vendors to achieve transformation objectives effectively and efficiently. We are finding good success in many such large deals using our differentiated AI-infused solutions. The mega deal with Tryg Insurance is a good example of how we scale longstanding partnerships with our contextual knowledge, unmatched delivery track record, and leadership in AI. Now, I want to move on to another important message. In the last few quarters, we have undertaken many internal and external transformation initiatives to accelerate the adoption of AI within TCS and our clients. We've been engaging with our clients in understanding the challenges they are facing in scaling AI and collaborating with technology partners in academia to unlock the true potential of this technology. This experience gives us the confidence to say that TCS will become the largest AI-led technology services company, enabling business, government, and society. This transformation is currently underway. Early this year, we expanded our leadership team, with Aarthi Subramanian joining us as COO and Mangesh Sathe as CSO. We also created the new roles of Chief Digital and Information Officer with Jenna and Head of AI and Services Integration with Amit Kapur. We are committed to making significant investments towards transforming ourselves in order to realize our vision. At this time, our investments are focused on these five pillars. Tata Consultancy Services raised the power of AI, our internal transformation to drive an AI-first culture, build AI solutions, and scale AI for connected intelligence. Redefining all services in a H uman-Plus-AI services model, we have established an AI and Services Transformation unit for this purpose. Third, building a future-ready talent model. We are investing in future-ready skills, embracing new ways of working, and recruiting top talent locally in the markets we operate. Fourth, making AI real for clients. We are redesigning business value chains for every industry. We are also investing in the development of innovative cross-industry solutions, leveraging AI. Last, expanding our AI Ecosystem Play. We are deepening our partnership in the AI ecosystem, stepping up our efforts in M&A and foray into new business ventures. You would have seen the press release earlier for ListEngage and the new entity for AI infrastructure in India. I'll now invite Samir to share the update on our financial performance. Thank you, Krithi. In the second quarter of FY 2026, our revenue was INR 65,799 crores. In reported currency, our revenue grew 3.7% QoQ and 2.4% YoY. In constant currency, our revenue grew 80 basis points sequentially. Our Q2 operating margins stood at 25.2%, reflecting a sequential improvement of 70 basis points. This is excluding one-time severance provided this quarter. We achieved good growth momentum across all verticals this quarter. Our disciplined execution helped us expand our margins while making strategic investments. We have prioritized wage hikes, building future-ready capabilities, and establishing new ecosystem partnerships. Currency helped us support margins by 80 basis points. Giving wage hikes to our employees was our priority, and so we have rolled out our increments for 80% of our workforce. This increment, combined with additional quarterly variable allowances, impacted our margins by 70 basis points, offset by a benefit of 40 basis points from rebalancing of pyramid and 20 basis points from operating efficiency. We continue to make CapEx investments in infrastructure. A few examples are we inaugurated our innovation center in Singapore, expanding our AI research and innovation footprint to 13 hubs globally. This helps clients accelerate innovation by providing quicker access to advanced capabilities and TCS's expertise. A new AI-driven operations center in Mexico City. In Europe, we expanded our software-defined vehicle innovation capabilities with three new hubs. Lastly, recently we opened our flagship TCS Interactive Design Studio in New York City to help clients create iconic products, services, and experiences that are seamless and unified across digital ecosystems. It is also important to note that we are on a drive to expand our already vast pan-India footprint further in both Tier-1 and Tier- 2 cities to the tune of about 50,000 seats in the next few years. Our net income margin was at 19.6%, and our EPS grew 8.4% year-on-year. Our accounts receivable was at 75 days outstanding in dollar terms, and the net cash from operations was $1.5 billion, which is 110.1% of net income. Free cash flows were at $1.4 billion, and invested funds at the end of the period stood at $6.3 billion. Our industry leading margins are an indication of our belief that we have the strongest ability to absorb market fluctuations and competitive pressures. Growth, when achieved through value creation and innovation, will have a positive impact on margins over time. We continue to work towards getting back to our aspirational band of 26%- 28%. Our financial discipline is also evident in our strong balance sheet, robust cash flows, and consistent shareholder payouts. We are committed to maintaining a healthy financial position that enables us to invest in a bold vision and return value to shareholders. This financial strength positions us well in our journey to become the world's largest AI-led technology services company, to build AI-centric capabilities, invest in talent development and acquisition, strengthen our ecosystem partnerships, while investing in infrastructure like data centers and scaling AI platforms. Our capital allocation policy remains unchanged. We continue to prioritize the return of substantial free cash flows back to our shareholders. The board has recommended a second interim dividend of INR 11 per share. Now, I'd like to invite Aarthi. Thank you, Samir. Good evening to all of you. As called out by our CEO, we want to become the world's largest AI-led technology services company. Towards this goal, we have taken a number of steps. I'll share some perspectives on each one of them, starting with the internal AI transformation that's well underway within the company. We're being focused on internal transformation, which is now under the broad umbrella of what we call TCS to the Power of AI. We are pursuing this across three tracks. The first one is building an AI-first culture. To make everyone in TCS to be AI-first, we have democratized access to AI learning by enabling various AI tools and environments for our employees to explore, experiment, learn, and embed AI in their work. The benefit of this is visible in our AI-ready talent. We now have close to 160,000 associates with higher-order AI skills. Our leaders are walking the talk. Over 10,000 of our sales and delivery leaders have gone through an immersive and hands-on AI Dojo program that we have rolled out. I'm also happy to share that in our effort to make everyone an AI practitioner, we just established a global benchmark in our recently concluded global annual format of TCS to the Power AI Hackathon. We saw over 281,000 TCSers participating in this hackathon, submitting over half a million entries, which include both ideas as well as solution builds. As we shared this with our customers, we are hearing encouraging response in replicating similar culture change within their organizations, and they are very keen to work with us to innovate with AI. The second initiative as part of the internal transformation is building AI-first solutions. As part of this, we are looking at our internal functions: finance, HR, legal, all our internal functions, and also our own IT operations, including how we support our systems as well as build systems. One such case in point in HR, we have been reimagining how we look at our employee engagements with an AI-first approach, and we are also looking at rolling out a learning copilot for every associate. The third aspect of our internal transformation is how do we continue to scale these initiatives. We have set up a TCS to the Power AI office that addresses three critical foundations of our initiatives: Scaled Agentic AI architecture, Responsible AI use, and Platform and Partner Innovation and IP creation. These foundations are in place and are continuously evolving within the dynamic ecosystem around us. Now, let me talk about how we are scaling AI for our customers. The journey of making AI real and experiential for our customers cuts across industry value chains, enterprise platforms, and solutions. We see this journey starting with ideating and innovating, leading to building and scaling with AI. We are taking AI close to our customers with AI Innovation Days at customer locations, TCS Pace Ports, and our India delivery centers. We are leveraging rapid build as an approach to deliver business outcomes with AI in a matter of weeks. We are also helping our customers scale AI across their enterprises through AI Labs, AI Office, and AI Platforms. We are also building Agentic AI solutions for business value chains in each industry and enterprise functions across all our industry verticals. Moving on to the third pillar of our strategy, we are transforming every service line that we operate in and offer to our customers. We are reimagining each of these service lines with a Human-Plus-AI collaboration solution blueprint. This blueprint uses five Scale AI Autonomy Models to define the interplay between our employees and the AI agents/systems. As we progress towards our North Star ambition for each of these service lines, we are defining the art of possible of what the future can look like for each of these service lines. Sudeep and Krithi will cover the remaining two pillars of our strategy later in this call. Now, I would like to provide a brief update on cybersecurity. As all of us know, global businesses are increasingly experiencing cyber threats. These threats are getting more and more sophisticated. We are working closely with our customers to safeguard their interests. Recent incidents saw some of our TCS clients becoming victims to these cyber attacks, resulting in disruptions to their businesses. I would like to clarify that there has been no compromise of TCS systems, nor any impact to other customers of TCS in these incidents. The investigations for these incidents are being managed by the customers respectively, and TCS is playing a significant role in supporting the customers in their recovery efforts. These efforts have been positively acknowledged by our customers. I would now like to invite Sudeep. Go ahead, Sudeep. Thank you, Aarthi. Good evening, all of you. In quarter two, we announced a wage hike for over 80% of our workforce with effect from September 1st. Our quarterly variable allowance was higher than last quarter, reflecting our commitment to reward employees for their contribution. TCS has always been first in announcing wage hike across cycles. The IT services industry is rapidly changing with new technologies like Gen AI, shifts in operating models, and changing client expectations. This is a great opportunity for TCS to reposition itself and become future ready. As Krithi outlined, we have embarked on our journey to become the world's largest AI-led technology services company. Building a future-ready talent model is a critical and core element of our approach. Towards this, we are making efforts across four fronts. First, creating personalized learning pathways using artificial intelligence for its employees. We are also working with the academia to introduce skills required for next-generation technology and human-AI collaboration. Next is acquiring top talent from industry for cutting-edge skills and capability. The third one, hiring diverse skills locally across geographies. We have perfected this model in Latin America, and a large local workforce is in all key geographies, including the U.S., U.K., and Europe, which we will continue to expand. Finally, we have released 1% of our workforce, mainly mid and senior level, with skill and capability mismatch. We are providing the impacted employees with benefits, counseling, and outplacement support for their transition, as well as severance at terms higher than industry standards. Additionally, there has been involuntary attrition as part of our regular ongoing efforts pertaining to performance and bench policies. With the new hires, the release and attrition voluntary and involuntary, the global workforce for Q2 FY 2026 stands at 509,314. Finally, on H1B, we have significantly localized our workforce in the U.S. Approximately just about 500 associates have traveled to the U.S. on H1B. We believe our business model will be able to adapt quickly to any changes in immigration policy. In Q2, we provided INR 1,135 crore towards severance. The severance package is much better than industry standards. We approach this whole exercise with empathy and care. We are on a journey to build a strong future for our clients and all other stakeholders. We'll continue to nurture our employees and recruit future relevant skills required for our growth across all markets. We'll continue to be a net job creator. Lastly, we continue to be benchmarked with the best employers globally for our workplace practices and policies. In Q2, we won more than 23 awards globally across various aspects of the HR value chain, including our work towards gender equity. I will now like to invite Krithi. Thank you, Sudeep. Earlier in the call, I had articulated the five-pillar strategy to become the world's largest AI-led technology services company. Aarthi spoke about our internal transformation, TCS to the Power of AI, and also how we are reimagining all our service lines and making AI real for our customers. Sudeep spoke about the future-ready talent model. Moving on to the fifth pillar of our strategy, we will be significantly expanding our participation in the AI ecosystem. Towards this, we have built strong partnerships with deep tech companies, hyperscalers, niche startups, among others. We are deepening our participation in the AI ecosystem by expanding into adjacencies. We are creating a world-class AI infrastructure for all stakeholders, including enterprises, hyperscalers, and sovereign requirements. Earlier this year, we announced the launch of TCS Sovereign Secure Cloud. We are seeing very good traction for the same in our client base in India. In partnership with IBM and the Andhra Pradesh Government, we are deploying India's largest quantum computer in the country's first Quantum Valley Tech Park. We are also forging strategic partnerships with key technology players. We have formed a strong 360-degree partnership with all major technology players, including all the hyperscalers, generative AI players, cybersecurity product companies, enterprise product companies, and specialist AI solution providers. Today, our board approved the creation of a TCS subsidiary that will focus on building a sovereign AI data center with a capacity of up to 1 GW. We also have stepped up our efforts in pursuing acquisitions to enhance our capabilities, including high-end services, intellectual property, and market presence. Towards this, we also announced, just today, the acquisition of ListEngage, a leader in marketing tech and Salesforce. Our journey to becoming an AI-led organization is anchored in bold transformation, from talent and infrastructure to customer value and ecosystem partnerships. With this objective, TCS is poised not only to lead the AI revolution but to shape a future where technology and human ingenuity together create lasting impact for all. We are confident that staying true to our values will lead us to sustainable long-term growth with superior profitability. I'll now open the line for questions. Thank you very much. We will now begin the question and answer session. Participants who wish to ask a question may press star and 1 on their touch-tone phone. If you're using a speakerphone, please pick up your handset while asking a question. This is required to ensure optimum audio quality on the call. If you wish to remove yourself from the question queue, you may press star and 2. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Yogesh Agarwal from HSBC Securities. Please go ahead. Hi. Thank you so much. Krithi, a couple of questions. Firstly, the height and the investments in AI are a very welcome change. My question was, can you provide a little more clarity on the CapEx required? Because 1 GW seems to be a very, very big investment. I mean, global references are almost $20 billion of investment. What is the time period? What is the kind of CapEx? You said it is sovereign. What does it mean in terms of the clientele? Would you be selling into your traditional clients or mostly in India? A little more clarity would be very helpful. Yogesh, from a CapEx perspective, while we have set a target of 1 GW, we will be doing it in phases. We expect to achieve 1 GW over a period of 5 - 7 years. Our calculation roughly is about every 150 MW would be about $1 billion. It is not that we are going to put all the money in year one. We also clarified that this would be a combination of equity and debt. We will also bring in finance partners for the equity. If we require more color, Samir can provide on that. The reason that we are saying sovereign cloud is it is going to be established in all centers in India. It will be hosted, all the data. We are expecting all data and compute to be hosted in India and not leave the shores of India. That is the reason we are saying it is a sovereign data center. Just to provide some more information, our current objective is to provide all passive components. The client whose server is occupying, they will bring in their compute and storage. Great. Thank you. We're hoping to sell this to the pure play AI providers, the deep tech companies, the hyperscalers, and to a great extent, the government aids in India and the Indian enterprises are the expected participants here. OK, thank you. Just secondly, on the growth, you said the demand environment hasn't changed, and the macro uncertainties are the key reason. The current, while the quarter has been a little bit of a beat, the current growth rates have not been impacted by deflation on STLC by AI. You think that's not a factor? It's all macro? Yogesh, we have had a better growth compared to Q1. As I said, macros have not changed much. What our deep engagements with our clients and the AI solutions, the rapid build that we take to our clients, all of us give us the confidence that we will be able to sustain the growth momentum or improve the growth momentum compared to H1. Otherwise, there's no major change in the demand environment. Very good. Thank you. Thank you. We'll take our next question from the line of Sudhir Guntupalli from Kotak Mahindra AMC. Please go ahead. Yeah. Hi, Krithi. Thanks for the opportunity. A follow-up to what Yogesh has asked. On this AI data center move, currently, do we have any tie-ups with any of the, let's say, large consortium players like a Stargate or any of the deep tech players, either for bringing in more equity investments or for being our tenants once this is set up in the steady state? Any broad indications on the revenue per megawatt you're looking at, the EBITDA margins, and the IRRs you are expecting on this data center investment? In terms of what Krithi talked about, finance partners, we are speaking to multiple partners. We'd finalize in terms of combination. It could be one or more coming in. Also, in terms of customers, as he called out, it would be hyperscalers, India enterprises, government. We'd look at in terms of overall partnership. In terms of metrics, too early to call out. We have just set up the subsidiary. It would be about 18 - 24 months when the first revenue starts kicking in. At the appropriate time, we'll start calling out the metrics as well. Fair enough, sir. Just if I got to understand the operating model right, did you say that we'll provide it on a cloud service provider basis, a colocation basis, or just as a managed services basis? It'll be on a colocation basis. OK. It'll be on a colocation basis. OK, sir. Thank you and all the very best. Thank you. Thank you. Next question is from the line of Ankur Rudra from JP Morgan. Please go ahead. Hi. Thank you. I just wanted to understand on this AI transformation you're doing, what does it entail in terms of existing client engagements? Do you have a sense of potential productivity gains or any kind of change in scope from a deflation or inflation perspective on your existing services as you transform? Ankur, see, this whole belief and confidence on becoming the largest AI-led services company is based on the strength of the existing client relationships and the partnerships that we are building with all the players in this ecosystem. We expect every project that we do will be AI-led, which means that we will be offering speed. We will be offering, we could be offering, flexibility, and there could be productivity gains also in these projects. We will also be doing projects that could not have been done without AI in the past. Our expectation is the overall scope of engagement or size of engagements would definitely increase. There would be productivity benefits that the clients would get in the individual project, and we also will get some productivity benefits in doing these projects because we will be leveraging AI. Got it. Understood. I just wanted to clarify a couple of things. One, was there any headwind on the client this quarter which had a cybersecurity incident in terms of your revenues and margins? Also, the second clarification was if the redundancy charge we took this time, given 1% was impacted, should we expect something similar in future quarters also? No. First on the headwind, Ankur, the only headwind we impacted because of the nature of the outages they had, we could not start some of the projects that we were planning to start. That was the headwind. Otherwise, there was no other significant headwind because we were working very closely with the customer in helping them recover the overall operations. The second question on the charges we had taken for the redundancy, as we explained before, we would be continuing this exercise throughout the year. At the same time, we are not chasing a particular number here, but we will continue to do this throughout the year. Whenever we are paying, if you are paying any redundancy charges, we'll take the charge appropriately in the next two quarters. I cannot quantify what would be the number at this time. Appreciate it. Thank you and best luck. Thank you. Next question is from the line of Ravi Menon from Macquarie. Please go ahead. Hi. Thank you. Congrats on a really broad-based growth. If I'm looking at the data center investment again, what really prompted this? This is very unlike, I'd say, our approach so far. We've been asset-light. Yeah. Ravi, we've been looking at opportunities to expand our play in the overall AI ecosystem. If you look at it, we've been working with many of them as a solution provider, solution integrators, or leveraging the cloud. In the past, if you look at it, we also wanted to expand the footprint in India, leveraging the participation we have with all these partners. As you saw, I know some time ago, we've also been in the private cloud to a limited extent in the past. We announced recently the secure sovereign cloud for India requirement. We also announced our participation in the quantum program with the Andhra Pradesh government. In order to, we looked at this as an important adjacency that we should enter into. With that in mind, we also strengthened our partnership and relationship with the hyperscalers and the deep tech by doing this. All this put together, we thought, and of course, the most important thing is our calculation, the unmet demand that's going to be in the data center space. We believe currently, our calculation shows that we have only 1.2 GW of capacity in the country. In the next five to six years, it can go up, the demand can go up by almost 10 times. Whereas the capacity, at least committed capacity, is only about 5 GW- 6 GW. That is going to leave so much of unmet demand. All these things put together, we thought it's a good opportunity for us. The most other point is it also guarantees a stable annuity revenue as well. Thanks so much for the detailed explanation, Ravi. The second question on the productivity improvements that you're seeing in AI. If I understand correctly, the primary benefit of Gen AI is only in application development from scratch, right? That's a relatively, I'd say, small part of the overall market that we play in because what we do is primarily IT outsourcing, which is application maintenance and infrastructure maintenance, things like that, right? Would that be right that those activities we already have level one support more or less automated? To the existing book of business, how should we think about the impact of AI? Yeah, I think, Ravi, when you look at the existing book of business, right, when you look at our application support services or our infrastructures, they are increasingly becoming AI-led. When you look at how we deliver these services, there are significant opportunities to drive productivity benefits and also drive the quality of the service delivery with AI. That's where the reimagination is happening. The initial productivity savings are starting to be seen. As we increase the level of autonomy, as we understand these technologies better, you know we should be looking at further productivity benefits. The second portfolio, which is significantly, again, aided by AI, is our software engineering lifecycle. Again, starting to see good benefits coming in. There is an evolution, right? You start with the single digits, 10%- 15% productivity. There's an evolution to reach 20%- 25%. That's a journey to achieve a higher level of autonomy. That's what we are driving. The third area where we are seeing significant, I would say, opportunity is around AI-powered modernization. As you would appreciate, many of our customers globally have a lot of technology debt that they have carried over the years. Gen AI and agentic AI are powerful tools to really address the tech debt, right? You can actually use these AI, Gen AI, to understand the legacy code and forward engineer and deliver the new code. Modernization with AI is a huge opportunity. We are seeing significant uptake across customers. I would say right now, significantly in BFSI. We expect to replicate this across other verticals. Thanks a lot, Subramanian. If I recall right, you already announced a North American bank that's doing a complete mainframe modernization using AI, right? Yes. Yes. Yes. All right. Thank you, best of luck. Thank you. Thank you. We'll take our next question from the line of Gaurav Rateria from Morgan Stanley. Please go ahead. Hi. Thank you for taking my question. My first question is around investment in the new subsidiary on data center. Should we look at this investment as a standalone new business unit on providing colocation services, or should we think about having a very thick synergy with your existing portfolio of services using this asset-intensive business to build some services on top of it? The business itself, we'll be keeping it separate. It will have separate management bandwidth. We are in the process of putting in an entirely separate team outside of TCS for this. It will have adjacencies with TCS. It's a natural extension in terms of what partnerships we are looking at creating with the hyperscalers, what services we want to provide to our customers. This nicely fits in as an adjacent service. If I may just add to what Samir said, Gaurav, if you look at the entire AI stack, starting from infrastructure as the starting layer all the way up to the apps and the agentic apps at the topmost layer, this gives us the coverage across the AI technology stack. Got it. My second question is on the interplay between humans and AI that you talked about. How is it going to change the delivery model and the billing models? Do you think that we'll incrementally move away from effort-based business model to outcome-based business models? That is how the business should evolve, and there should be more nonlinearity in the business going forward. I would say, Gaurav, I think that is the direction in which the model is going to evolve. These are initial days. We are starting to make commitments on outcome-based projects with select customers, and there are learnings. This is a model that we see increasingly evolving and becoming more mainstream with customers. Got it. My last question is that should we evaluate or should we consider this new adjacency as a completely different business with respect to the return ratio profile, given that right now we are a very asset-light business and having a very different return ratio profile? Just trying to understand, like, you know, how should we think about from a medium-term perspective about the company? As we said, this is an investment which will come. It would have partners coming in. From a profitability perspective, I don't think at an overall TCS level, it will be margin dilutive. Return ratios also, given the overall size expected over the years, it should not have a significant impact. Our ROEs are currently over 50%. We still expect it to be benchmarked. OK. Thank you so much. This is very helpful. Thank you. Thank you. We'll take our next question from the line of Surendra from Citi. Please go ahead. Good evening, everyone. A couple of questions. In your prepared remarks, you said that FY 2026 growth in international business will be better than FY 2025. I just wanted to clarify if this is in constant currency terms, USD terms. Could you also tell us what the comparable growth in FY 2025 was? I don't have the FY 2025 number, H1 number immediately with me. Go ahead, sir. It was about 70 basis points. It is in constant currency terms. On a constant currency basis, 70 basis points. This year will be better than 70 basis points. Understood. The second question is, with the release of 1% workforce, the headcount declined by 20,000 people or 3%. What you had announced earlier was 2%. Should we expect a similar kind of headcount reduction in the next quarter as well? For most, Sudeep, 20,000 headcount is a factor of voluntary and involuntary attrition. You should see that. As we announced against the 2%, we have midway. We have done approximately 1% of it. Like what Krithi just mentioned, we don't have a target. We're not chasing a target. We'll continue to evaluate everyone after all the investment in learning and development that we've done. Where we find certain mid and senior level people are not able to find the right role based on their seniority, those are the ones that we will release with a lot of care and providing all the required support. Just to clarify, there will be no involuntary attrition beyond the 1% number. Is that understanding? No, I didn't say that. See, we estimate it to be 2%. We are currently at 1%. We will continue to evaluate people whom we can redeploy, whom we are not redeploying. Those are the people that we will release. Just one last clarification. Sorry. Sorry, Sorry, go ahead. No, did I answer your question? Thank you. Just one last question, Krithi, Aarthi. In terms of the data center business, there are a lot of businesses which are synergistic to AI if we take such a broad view of things. Is there clarity in terms of what other areas we could possibly invest in? We've been evaluating, Surendra, multiple opportunities. As I said, this one looked more attractive for us because of the demand commitment based on the discussion that we've been having with the potential buyers, the demand commitment we could get, the kind of revenue profile, the committed annuity revenue profile it has, and the potential unmet demands we'll have in India. All combined with this looked most attractive for us to start with. We'll continue to explore. If there are other adjacencies that come up, we'll explore. Samir, just one clarification on ROE of this new business. What is the expected ROE versus your current ROE of 50%+, as you highlighted earlier? The ROE of this business, as you all have rightly identified, it's capital intensive, will be low. What I'm saying is overall TCS ROE will remain market benchmark. Understood. Thank you. Thank you. We'll take our next question from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi. Thank you for taking my question. My first question was a clarification. The statement which you made that TCS intends to become the world's largest AI-led technology services company, how are you defining that as the largest AI-led technology company? Which metrics you are targeting at? Kumar, as I said, based on the discussions that we've been having with customers and based on the kind of, Aarthi talked about the internal training we did, Hackathons we did, number of participation, we believe that we, in multiple metrics, right, be it in terms of number of people participating, number of projects which we'll be doing, all combined together, we would definitely, we will become with the aspire to become the largest. If you ask me one single metric today, I don't have it, to be honest. We will be evolving. How do we measure ourselves on a year-on-year growth and improve on this? That's the honest answer. We are confident that we'll be able to have the biggest impact that we'll deliver in the industry due to leveraging AI. Got it. Thanks for that. My second question was around margin. We have seen sequential improvement. Now the wage hike is behind you. Pyramid rationalization also would start kicking in. Going by your comment, your second half growth should be better than the first half. For the rest of the year, is it fair to expect the margin should continue to see an expansion? Kumar, as you know, in H1, we have improved 100 basis points. We will continue our journey towards our aspirational band of getting closer to 26%. The takes on it or the puts on it have been in terms of the implications which you called out. The wage hike was in Q2 for one month. It will be for the full quarter next quarter. Also, in terms of the investments which we have called out, would have an impact in terms of we have been investing. This would have increased investment requirement. Irrespective of it, we would want to inch closer to 26%. Great. Thanks a lot for that. Thank you. Next question is from the line of Nitin Padmanabhan from Investec. Please go ahead. Hi. Good evening. Thank you for the opportunity. Just a couple of questions. One is, in the last quarter, on the deal, we have had very good deals on a consistent basis. You had alluded to three points that were not leading to better revenue conversion, one of them being projects starting at a lower pace and the other one being some projects being paused. How is that sort of evolving at the moment? Nitin, that point, like we probably are alluding to, it's in a much improved, I would say much improved, so improved situation. The number of project deferrals or projects getting passed are reduced compared to the last quarter. Got it. Incrementally, we should see better attrition. At least growth should be in the positive territory here on. You alluded to that. That is our goal. Correct. Any incremental update on, let's say, BFSI or consumer and Europe? I think last quarter, you were a little tepid from a commentary on those three. Just wanted your thoughts there. See, if you look at the momentum, growth momentum, right, all of them have improved. See, like BFSI continues to grow globally. Particularly, BFSI North America has done well. We were, and similarly, if you look at Europe, Europe has done well compared to last quarter. Correct, Samir? Even if you take CBG, you mentioned like it was such that the growth has been largely arrested. Overall, we expect most of the industry segments to bend the curve, subject to the seasonalities of Q3. They'll be getting into the growth momentum. Of course, the Q3 seasonalities would be in play. Got it. On the data center CapEx, maybe roughly based on what you said, it's maybe around $6.5 billion over a seven-year period. From a cadence perspective, how should we think about it, the early part of the seven years versus the later part? Would all this CapEx be, you did mention partners, would it be partially by partners and partially by us? Just a clarification on both. Definitely, it will be partially by partners, partially by us. At this time, we told you it's about five to seven years for the complete build-out of 1 GW. Currently, we expect it to be more uniform. Uniform. Uniform. If there is an increased demand, if we have to accelerate, we will definitely calibrate it at that time. Current planning is it will be phased out uniformly over the six years. Got it. Just one last one, if I may. Any color on the kind of deals in terms of sizing? Are you seeing a return of smaller deals or discretionary? Any improvements there that you have seen during the quarter or directionally? There is no significant improvement. At the same time, when Aarthi spoke, she was mentioning the number of rapid build projects that we are doing. We do see such projects because they tend to be smaller in nature, with smaller tenure. We tend to complete them within a quarter. Such projects are increasing in number. We also find more modernization projects. Some of them tend to be short. While a large mainframe modernization would take a long time, some of the other modernizations can also be completed in a short time. Such projects are increasing. Overall, if you ask me, is the number of short-term projects or smaller projects increasing compared to larger projects, there is no significant change. Perfect. Thank you so much, Krithi, and all the very best. Thank you. Thank you. Next question is from the line of Abhishek Kumar from JM Financial. Please go ahead. Hi. Good evening. Two quick questions. About the cybersecurity instance, just wanted to check if the issue has now been resolved. The projects you said which couldn't start, have they now started resuming? That's the first question. Abhishek, to your question, yes, I think the recovery experts have been completed. You know all the sales and manufacturing systems are all up. This happened just this week, early this week. I think we expect the projects to pick up in the coming weeks. Great. That's good to hear. Second, you know near term, especially 3Q, any early indication of how furloughs are looking this year compared to previous years? Generally, we have seen that in a weak demand environment, furloughs tend to be longer. Any such signs at this stage? At this time, we are planning, based on the inputs we have, it's likely to be similar to last year. OK, sure. Thank you and all the best. Thank you. Next question is from the line of Vibhor Singhal from Nuvama Equities. Please go ahead. Yeah. Hi. Thanks for taking my question. Krithi, just once again, on the AI data center investment, given that you mentioned that it's going to be more like a sovereign AI data center and given the GDPR regulations across the world, is it fair to say that this will have limited synergies with our existing clients? Most of the clients that we would be deploying using this data center would be more India-based, and that is where we would be looking for any synergies, if at all, from our current. This is, again, Vibhor, as we mentioned, it's a passive data center. The likely users who could be the hyperscalers or deep tech who want to do the training inferencing in India or Indian enterprises, they want to leverage it as a private cloud. These are the kind which we are not expecting our overseas customers to be hosted specifically in India. It's more like what we are offering for these hyperscalers and India-based businesses or deep tech. Got it. You mentioned that we've basically gone ahead with this as for the demand commitments and the annuity commitments and different. We would have already had conversations with. I did not say demand commitment. I'm saying that there is a lot of unmet demand in the market that led us into getting into this business. Are there any MOUs that we would have signed or any early conversations that we have got into with potential clients? Would that be explored? We are having quite a few conversations with our customers to explore the demand. We are quite positive about the prospects. Got it, got it, got it. That's my last question from my side. In terms of the revenue in this quarter, we saw a sharp jump in the sale of equipment and software licenses revenue. Almost more than half of the incremental revenue in this quarter came from that. Just a quarterly specific thing, or do you think that could be a trend going forward as well? In fact, if you look at the equipment and software expenses, there's about INR 200 crore- INR 250 crore increase. That's practically the increase. BSNL this quarter has remained flat. Got it, got it. I mean, it's expected to remain in the same range as it has been. We have Q3 seasonality, which you would typically see. Other than that, we don't expect, unless we get the BSNL PO later. Thank you so much for taking my questions. Wish you all the best. Thank you. We'll take our next question from the line of Rishi Jhunjhunwala from IIFL. Please go ahead. Yes, sure. Thanks for the opportunity. Just harping a little bit more on that AI investment. A couple of reasons that we provide were that the demand in this space is very high and provides a new stream of annuity revenues. Outside of that, does it put us in any kind of disadvantage versus our peers if we are not doing this investment? Does it put us at an advantage versus other peers on the global revenues that we earn here, if at all? I am. If not. Go ahead, Rishi. Sorry, complete the question. If that is not the case, then if you look at the overall technology spending landscape, there would be a lot of pockets around software and solutions where those kind of investments probably would have been more synergistic to us. Rishi, there are definitely a number of places where we can invest. We took this place because it creates a synergy with our existing, see, hyperscalers also happen to be our large clients as well, large GTM partners as well. We also have deep relationships with all the AI-native companies who could potentially be using it for their India requirement. We believe that there will be a natural synergy that will be created. As I said, we want to play in these ecosystems. Yeah. It gives another group synergy as well. If you look at the Tata Group companies or in the power, real estate, project management business. Tata Communications. Tata Communications. There is a different kind of synergy we can build in here. From a client perspective, we believe a strong collaboration can be derived out of this one. The Tata Group synergy, we see that as a very unique Tata advantage. Understood. Second question is, I think in the opening remarks, you hinted that you know why we have done this one acquisition. There seems to be some focus around trying to do more acquisitions as well. I guess this is something we've done after almost 10 years. Should we assume that our acquisition intensity may also potentially go up in the coming years? How does that change our capital payout policy, if at all? See, one, definitely, if I answered the first question, is yes. We are very actively looking at more opportunities for acquisitions. Capital payout policy, we will see now at this time, the stated policy continues to be to return 80% - 100%. There are substantial free cash flows after all investments. If we end up making a huge acquisition that impacts our ability to do a cash flow, we will be upfront about it. Understood. All right. Thank you, sir. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you. Thank you, operator. In Q2 FY 2026, our revenue grew 0.8% sequentially in constant currency with an operating margin of 25.2% and a net margin of 19.6%. We saw good growth momentum across most verticals, service lines, and geographies this quarter. International business fueled growth, along with India and emerging markets, performing well despite BSNL engagement ending in Q1. Our TCV was robust at $10 billion in Q2, which grew 16% year- on- year, including a mega deal win using AI-enabled differentiated solutions. We reiterate our outlook for FY 2026 international revenue growth being better than last year. TCS will continue to be a key jobs provider in the industry. We want to become the world's largest AI-led technology services company, enabling business, government, and society. With that, we wrap up the call today. Thank you all for joining us. We wish you and your families a very happy festive season ahead. Thank you. Thank you, members of the management. On behalf of TCS, that concludes this conference call. Thank you for joining us. You may now disconnect your line.