IT spending to pick up after trade talk clarity: TCS chief

Time of India

2 days ago

Bengaluru: TCS is navigating a challenging environment marked by delays in client decision-making and cautious discretionary spending, especially on projects with longer return cycles.
In an interview with TOI, TCS CEO K Krithivasan expressed confidence that international revenue will exceed FY25 levels in FY26, contingent on improved clarity expected by late July or early Aug as trade discussions near completion. Excerpts:
How has delay in decision-making and discretionary spends evolved since March quarter? TCS expects discretionary demand to recover based on tariff-related clarity.
We find that programmes with immediate or shorter-term ROI (return on investment) are continuing.
However, programmes perceived as more long-term are either fast-tracked or reduced in scope to be consumed in the short or medium term. Programmes with ROI spread over a longer period are being deferred or slowed down. When I mentioned July and Aug, I was hoping trade discussions between countries would conclude by then.
Once clarity emerges and consumer confidence picks up in the US, I am hopeful customers will start spending.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
De MINI Countryman. De grootste MINI ooit.
MINI
Ontvang quote
Undo
You Can Also Check:
Bengaluru AQI
|
Weather in Bengaluru
|
Bank Holidays in Bengaluru
|
Public Holidays in Bengaluru
What were the key factors behind a sharper decline in key verticals and geographies, and to what extent did the BSNL deal wind-down influence the revenue drop?
We don't have any client-specific issues. Projects are getting descoped or delayed across multiple industries. While BFSI has grown in North America and the UK, it hasn't grown in Europe. On the BSNL deal, close to 90% of the sites are carrying commercial traffic.
It's a natural and successful wind-down of the project — it had an impact of about 2.8% on the quarter-on-quarter growth. The international market fell by 0.3%, so the greater contribution came from here, but it was not unexpected.
TCS COO said AI is driving efficiency at project level. How are firms measuring efficiency in AI-led coding tasks while accounting for the entire process? And is this shift starting to impact client costs yet?
If efficiency gains are limited to IT projects alone, the overall benefit remains constrained.
Even if IT projects deliver a 20-30% improvement in coding efficiency, that might only result in a 5-10% gain in overall value from conceptualisation to go-live. That's why end-to-end articulation and value-creation across all phases are essential to achieving meaningful productivity gains and measurable benefits leading to improved customer satisfaction and stronger sales performance.
Clients are becoming aware of AI-driven productivity gains. Is this leading to commercial models with built-in productivity gains even before they are requested?
If AI-led productivity is a good cannibaliser, we would happily embrace it because it's important to challenge ourselves in seeking productivity gains.
It's also important to transparently discuss with customers what gains can be passed on, as it requires some investment from our side. This is happening in almost all major engagements. We proactively look for ways to deploy AI and enhance productivity. Clients are demanding certain productivity benefits to be achieved and passed on to them.
We have discussions with customers about passing on productivity gains.
It's a natural process.
Employees say it's harder to secure projects matching their skills. Earlier, they usually found assignments within a month. There are reports that TCS has started withholding salaries for employees benched for extended periods.
It's always been expected that associates take responsibility for their careers. While HR supports project placement, we also expect associates to proactively seek new assignments after completing existing ones.
What you're seeing now is simply a more structured version of what's long been in practice. We aim to minimise bench time. Second, we invest heavily in upskilling. Once we've made that investment, we work to ensure associates are deployed.
While preferences are considered, projects are driven by client needs, not personal choice. We deploy based on training, demand, and skill alignment. If gaps exist, we work to close them before deployment.
Is there some slackness in the pyramid? Especially now that some resources are freed up after the BSNL ramp-down?
There's no specific slackness. While the work is labour-intensive, it doesn't directly involve our senior associates. Much of it was handled by third-party resources, not our own.