Narayan AmmachchiTata Consultancy Services’ latest numbers point to two clear trends: traditional IT spending is losing momentum, but vendors that pivot towards AI infrastructure services can still sustain growth.
The Mumbai-based IT major reported revenue of $7.5bn in the third quarter of fiscal 2026, a modest 0.6% increase over the previous quarter. Within that total, AI-related services generated $1.8bn in annualized revenue, rising 17.3% quarter on quarter and now accounting for roughly 5.8% of overall sales. That expansion helped offset seasonal weakness across other segments of the IT services business.
The contrast reflects mounting pressure on traditional application development and maintenance work, where pricing is tightening, even as spending on cloud infrastructure and AI platforms continues to attract client budgets.
The order book reinforces the shift. TCS signed contracts worth $9.3bn in total contract value during the quarter, driven by large deals in AI transformation, cloud migration and modernization projects, particularly in banking and financial services.
Despite macroeconomic uncertainty, BFSI remained the company’s largest revenue contributor, supported by vendor consolidation and long-delayed technology upgrades. Additional growth came from enterprise solutions, cybersecurity and cloud-led programmes. Targeted acquisitions, including Coastal Cloud, have strengthened TCS’s Salesforce and cloud capabilities, adding further momentum to its strategic pivot.
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