India's TCS beats revenue estimates on strong AI demand
Tata Consultancy Services (TCS), India’s largest software services company, reported better-than-expected third-quarter revenue on Monday, supported by rising demand for artificial intelligence-driven services.
The company’s consolidated revenue rose 4.9% to 670.87 billion rupees ($7.44 billion) for the quarter ended December 31, exceeding analysts’ expectations of 666.76 billion rupees, according to data compiled by LSEG, News.Az reports, citing Reuters.
Growth for the Tata Group firm was driven by increased AI-related technology spending, despite the quarter traditionally being seasonally weak as clients typically scale back operations during the year-end period.
At its investor day presentation last month, TCS revealed that its AI business now generates $1.5 billion on an annualized basis, accounting for roughly 5% of the company’s total annual revenue.
"AI services now generate $1.8 billion in annualized revenue," TCS said in its statement.
The Mumbai-based firm's quarterly net profit fell 14% to 106.57 billion rupees, which the company attributed to restructuring costs associated with layoffs announced in 2025.
Net profit came in below analysts' expectations of 130.24 billion rupees.
The company's total order book stood at $9.3 billion in the quarter, down from $10 billion in the previous quarter and a record $10.2 billion in the year-ago period. The firm had announced eight deals in the reporting quarter - the most among India's top-five IT firms - including deals with British food retailer Morrisons and Danish telecom operator Telenor.
The Tata Group firm is the first major Indian IT firm to report numbers in the current earnings cycle. Smaller rivals HCLTech will post figures later in the day.
TCS' Mumbai-listed shares closed 1.3% higher ahead of the results.
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