Indian software services exporter Tata Consultancy Services (TCS) surpassed revenue expectations on Thursday, driven by its banking, financial services, and insurance segments, and expressed optimism for growth in the second half of the financial year. This positive performance offers encouragement to the $283 billion Indian IT sector, which has been struggling with subdued customer spending this year amid uncertain global macroeconomic conditions, particularly in North America, its largest market. Analyst Piyush Pandey from Centrum Broking remarked, “If there are no further tariff surprises, Indian IT should gradually recover from this quarter.” TCS’s Chief Executive Officer, Krithivasan, noted a decrease in the number of projects being deferred or paused compared to the first quarter.
He stated that TCS has experienced revenue growth compared to Q1, emphasizing that while macroeconomic conditions remain largely unchanged, their strong client relationships and AI solutions enhance their confidence in accelerating growth rates in the second half. TCS, recognized as India’s most valuable listed company, reported sales of 657.99 billion rupees ($7.4 billion) for the September quarter, reflecting a 2.4% increase that exceeded analysts’ average forecast of 650.86 billion rupees. The revenue growth was primarily driven by the financial services and insurance sector, which constitutes a third of TCS’s business, with a 1% increase. However, the consumer, healthcare, and manufacturing sectors saw declines of 2.9%, 2.2%, and 1.1%, respectively.
TCS’s earnings for 2025 rose by 1.4% to 120.75 billion rupees, although this fell short of analysts’ average expectation of 126.29 billion rupees, attributed to severance costs totaling 11.35 billion rupees. In July, TCS announced a 2% workforce reduction for fiscal 2026, affecting primarily middle and senior management, translating to job losses for 12,200 employees. The overall workforce decreased by 19,755 during the quarter, marking the most significant quarterly decline in the company’s history. TCS’s total order bookings reached $10 billion for Q2, up from $9.4 billion in Q1 and $8.6 billion a year earlier, indicating a positive trend in an industry facing challenges such as a potential 25% tax on outsourcing payments and restrictions on H-1B visas.