Archive · 12 Oct 2026
TCS Expects Industrial Demand Recovery as AI Revenue Grows
Tata Consultancy Services is a company that helps other businesses with technology.
Its chief executive, K. Krithivasan, said demand is holding up in several important areas, including banking and technology services.
He expects industrial business to recover, although he said retail has faced pressure from inflation and tariffs.
TCS said its AI-related business has grown to more than $3 billion in annualised revenue.
The company says AI can help it work more efficiently, while also creating new business.
TCS’s operating margins stayed flat compared with the previous quarter, partly because it hired people and spent more in several areas.
Krithivasan said the US suspension of the PERM programme is not expected to create a major problem for TCS.
He said the company already hires locally in the US and plans to keep investing in local workers.
TCS reported 0.5% constant-currency growth in Q2, including 1.2% growth in international markets.
CEO K. Krithivasan said banking, manufacturing and technology services are supporting demand, while inflation and tariffs are pressuring parts of retail.
The company’s annualised AI revenue exceeded $3 billion, about 10% of its revenue, after rising by $500 million from the previous quarter’s reported level.
TCS said operating margins were held back by hiring, alliance investments, subcontracting costs and mergers and acquisitions.
Krithivasan said suspension of the US PERM programme would not be a hurdle, citing limited use of the programme and a shift toward local hiring.
- Who
- Tata Consultancy Services and its Managing Director and CEO, K. Krithivasan.
- What
- Krithivasan discussed demand, AI revenue, margins, organisational changes and the US PERM programme suspension.
- When
- In an interview discussing Q2 results and the start-of-quarter organisational changes.
- Where
- TCS’s international markets, including the UK, Europe, North America and the US.
- Why
- The interview addressed business demand and the factors affecting TCS’s growth, margins and hiring.
- Q2 constant-currency growth
- 0.5%
- International growth
- 1.2%
- Annualised AI revenue
- More than $3 billion, about 10% of revenue
- Quarterly increase in reported annualised AI revenue
- $500 million
- Productivity pass-on
- TCS said it remains in the 10–15% range
- US workforce
- More than 50% are green-card holders or citizens, according to Krithivasan
- Margin currency tailwind
- 10 basis points