TCS gets special attention from Tata Sons chairman; What N Chandrasekaran is planning at IT giant?

TCS’s AI push: With artificial intelligence (AI) taking the centre stage, Tata Consultancy Services (TCS) is stepping up its role as a default AI partner for Tata Group companies. An Economic Times report, citing people close to the matter, said that Tata Sons chairman N Chandrasekaran is now driving the TCS’s AI push.

The ET report said that Chandrasekaran is increasing his direct involvement with TCS to steer the company through a critical phase. The report, citing people familiar with the matter, added that renewed focus includes bolstering the role of TCS as default AI partner for Tata Group companies.

“The legacy business model of TCS cannot stay the way it was,” said a highly placed executive close to the matter. “Chandrasekaran has told his top team to do what it takes to grow and defend its turf.,” ET report said.

The Tata Sons chairman underlined the need for continuous upskilling to prepare for the impact of AI. He was addressing an annual company event in Dubai.

TCS Q3 Results Highlights

--TCS' annualised AI services revenue stood at $1.8 billion, registering a 17.3 per cent QoQ growth in constant currency. Operating margin remained stable at 25.2 per cent, reflecting steady operational performance during the quarter.

-- Net income rose 8.5 per cent year-on-year to Rs 13,438 crore, while net margin improved to 20.0 per cent, expanding by 40 basis points on a QoQ basis. Cash flow from operations was robust at 130.4 per cent of net income, underlining healthy cash generation.

During the quarter, TCS reported a total contract value (TCV) of $9.3 billion, indicating continued deal momentum.

-- Announced a strategic partnership with TPG, a leading global alternative asset management firm, to support the growth of TCS’ AI data center business, HyperVault. Signed a definitive agreement to acquire 100% stake in Coastal Cloud.

-- Expanding its long-standing partnership with Google Cloud, TCS has adopted the next-generation agentic AI platform, Gemini Enterprise.

-- Expanded its strategic partnership with large global Hyperscaler through a multi-year multi-million dollar deal.

-- A prominent North American software company has engaged TCS to provide down-sell prevention and churn mitigation services for end-users of one of its flagship enterprise platforms.

-- Expanded 18-year partnership with ABB, a global leader in electrification and automation.

Selected by the National Health Service (NHS) Supply Chain for application development support and maintenance of its core business systems and cloud infrastructure platforms, over a period of 5 years.

-- Expanded partnership with Aviva, the UK’s leading Insurance, Wealth and Retirement provider.

--Entered into a multi-year transformation and managed services agreement with Canada Life, a leading global life and pensions insurer, covering its UK and European businesses.

--Partnered with Cathay, a global premium travel lifestyle brand, to manage platform and digital workplace infrastructure delivering a robust foundation and enhancing the customer experience.

--A leading North American semiconductor company has chosen TCS to deliver comprehensive application support across its IT landscape, covering enterprise, cloud, and engineering applications, customer support portal, and around security operations center.

--A global leader in industrial logistics has selected TCS as its strategic partner to transform its IT landscape and make it fit for standalone operations post de-merger.

--Partnered with a leading European luxury watchmaker to establish a strategic nearshore delivery hub in Europe.

--Expanded decade-long partnership with Morrisons, one of the UK’s largest supermarket chains.

--Selected by a leading US grocery retailer to transform its IT Operations with composite AI.

--Partnered with a leading European luxury watchmaker to establish a strategic nearshore delivery hub in Europe.

--Extended the partnership with a leading global petrochemicals company for multiple years.

--A leading American healthcare company has reaffirmed its long-standing partnership with TCS for managing the enterprise-wide application portfolio.

--A large global pharma major has renewed and expanded its partnership with TCS for Pharmacovigilance and Clinical Safety operations.

--Entered a five-year partnership with Tata Motors to accelerate sustainability efforts.

--Announced the launch of an AI Experience Zone and Design Studio in London, reaffirming its continued strategic investment across the United Kingdom (UK) and its long-standing partnership with the UK economy.