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TCS upbeat on international growth, expects new AI projects to offset contract deflation

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TCS upbeat on international growth, expects new AI projects to offset contract deflation

Tata Consultancy Services (TCS) is seeing signs of improving demand, with growth across key markets and business segments, even as AI-led productivity gains put pressure on traditional IT contracts.

CEO and Managing Director K Krithivasan said the company had recorded its fifth consecutive quarter of positive international business growth, supported by banking and financial services, manufacturing and technology services. He also pointed to rising AI revenues and stronger total contract value (TCV) as encouraging signs for the business.

On profitability, Samir Seksaria, Chief Financial Officer, said TCS was prioritising investments in strategic partnerships, mergers and acquisitions, niche talent and delivery capacity to support future growth. While these investments are weighing on near-term margins, the company remains focused on operational discipline and long-term value creation.

TCS will also need to navigate seasonal pressures and acquisition-related costs over the coming quarters, with management emphasising growth over near-term margin expansion.

In July-September quarter (Q2FY27) Tata Consultancy Services Limited reported revenue of ₹73,188 crore, profit after tax of ₹13,884 crore and EBIT margin at 24.2%.

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