TCS Is Experiencing A Pause In Deal Cancellation, Says CEO K Krithivasan

Tata Consultancy Services Ltd. is experiencing a pause in deal cancellations, said Chief Executive Officer K. Krithivasan. "Currently, customers are reevaluating projects. The US election and Fed actions on rate cuts may give clients more confidence." he told NDTV Profit in a post-first-quarter earnings interview.

India's largest software services provider reported an EBIT margin of 24.7% for the first quarter of the financial year, down from 26% in the previous quarter, according to its stock exchange notification. Analysts tracked by Bloomberg had estimated a margin of 24.5%.

In the medium term, TCS will continue to stick to achieving a margin in the 26-28% range, Krithivasan said. Despite subcontracting costs having bottomed out and utilisation levels having peaked, pricing still remains the lever for achieving the targeted operating margin range, he said.

Though North America is a significant revenue contributor, India and Asia Pacific are starting to become big growth markets for TCS after the UK and Europe, the CEO said.

The company is doing a lot on the generative AI front, for which it is training all its associates and using AI capabilities internally, he said. TCS has close to $5 billion in GenAI deals in the pipeline.