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BENGALURU/MUMBAI — India’s Tata Consultancy Services (TCS) expects its retail and manufacturing clients in North America to step up spending on tech, following a similar upturn in its banking and financial services segment, a top executive of the nation’s No. 1 software-services exporter, said.
“We have heard about good holiday season sales [in the US] that should boost consumer sentiment, and manufacturing has some of the labor issues behind them,” TCS Chief Financial Officer Samir Seksaria told Reuters.
“If these three verticals [along with banking] improve overall, we should see a good recovery,” he said.
A man walks past a logo of Tata Consultancy Services at the company’s headquarters in Mumbai, India, on Jan. 11, 2024. REUTERS
Seksaria’s cautious optimism highlights broader global economic uncertainties and sticky inflation that have forced clients to keep a leash on tech spending.
The company’s revenue in North America, its largest market, declined for the fifth consecutive quarter, even as banking and financial services posted their best performance since June 2023.
Retail and manufacturing are the second- and fourth-largest revenue contributors to the $29 billion behemoth.
Last month, Walmart Inc., Amazon.com, and fast-growing e-commerce sites Shein and PDD Holding’s Temu saw record-breaking sales on Black Friday and Cyber Monday.
US online spending also rose nearly 9 percent to $241.4 billion during the recent holiday season.
TCS’ communications and media vertical, a capital-intensive segment that is currently one of the company’s laggards, will also see some pickup if interest rates start to go down, Seksaria said.
The comments echo TCS CEO Krithivasan’s sentiment that the incoming US administration is likely to remove policy uncertainty and boost client confidence to spend on discretionary projects.
On Friday, its Mumbai-listed shares closed up 5.6 percent, its highest single-day rise since July 2024.
TCS also played down concerns over the rise in insourcing by multinational corporations through global capability centers, potentially slashing work that would have been contracted to information technology players in the past.
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