India’s largest software exporter, Tata Consultancy Services (TCS), sees the country’s massive public sector projects as unique opportunities for learning and working at a scale that can’t be found elsewhere, said Girish Ramachandran, President, Growth Markets, TCS.
Last week, the company launched a slew of India-first population scale AI offerings, aiming to expand market share in the public sector and increase revenues from the country.
As of FY25, India accounted for nearly 8.6 percent of the company’s overall revenue of $30.18 billion. This would be about $2.6 billion -- a 62.6 percent year-on-year (YoY) growth in constant currency terms, giving enough reasons for India becoming a strategic bet for TCS to diversify beyond key markets and double down its focus on.
This comes at a time when core markets like North America continue to struggle to recover from slowing demand environment amid macro headwinds and pending tariff implementation from the US government. North America accounts for nearly 50 percent of TCS’ revenue.
“If you look at our numbers, last year, India was around 8 percent of the global revenues; it is typically 6-7 percent. So, an average 6-7 percent of a $30-billion revenue is still $2 billion in this market. India is one of the top 5 countries in the world (for TCS). This is our home market," Ramachandran told Moneycontrol.
“There is an optimism that the country will do well and we will continue to do better in this market,” he added.
Rightly so, not just TCS, peers like Infosys and HCLTech, too, are seeing strong demand and growth in the country. For Infosys, for the fourth quarter that ended on March 31, revenue from India grew 43.7 percent YoY in CC terms, but the overall revenue contribution from the country remained at 2.2 percent.
HCLTech, for the first time, called out India revenue contribution separately, among other geographies in Q4FY25. Though on a YoY CC basis, the India growth declined by 5 percent, the management remained confident of India becoming significant to its growth strategy in the near future. In Q4, India contributed about 3.3 percent to HCLTech’s overall revenue.
“We are looking at our services and software to be positioned in this market. So we'll continue to invest and grow our India business. Since it's a smaller base, even a minor change would show as a bigger percentage… but India is a big focus,” HCLTech CEO and MD C Vijayakumar had said at the company’s earnings conference recently.
TCS’ India strategy
TCS has been reporting higher double-digit growth in India for the past several quarters now. Earlier, this was mainly driven by the Rs 15,000-crore BSNL project it was working on. As the deal nears completion, TCS will be hunting for more such projects in India and other regional markets to fill the revenue gaps.
Thus the launch of its new offerings last week, including TCS SovereignSecure Cloud, low-code, no-code platform TCS DigiBolt and TCS Cyber Defense Suite, happened at an opportune time. The launch was well-timed as India is at the cusp of a further digital breakthrough, with its focus on semiconductor chips and sovereign AI innovations.
For these solutions, TCS has been closely working with the Ministry of Electronics and Information Technology (MeitY) to understand the government's needs and looks forward to deploying it into India’s future digital public infrastructure initiatives, while it will be open for private companies too.
These solutions align with India's data localisation requirements.
“India offers a very unique scale that you will not get anywhere else and the complexity that we do here, we do not get it anywhere else. So, these are all very unique learning opportunities, and if you are able to do these businesses profitably, there is nothing wrong,” Ramachandran said.
Moreover, TCS has been ahead of its peers when it comes to having better success rates in the public sector, running public-facing government services portals such as India's passport project, the Indian Railways’ IRCTC site, and India Post’s digital project, among others.
TCS also has the highest exposure to government projects in India, compared to its peers.
Though public sector projects are known to offer lower margins, Ramachandran denied and added that there are always other opportunities to compensate for that.
“We will not do anything which is not profitable. There might be some projects we will take, but that will get compensated elsewhere for profitability. We continue to keep the balance on profitable growth. But if you look at the public sector in India and the rest of the world, public sector in both cases pays well. It is not that there is a problem on the payment side,” he said.
Ramachandran added, “The good thing is that there are a whole lot of transformational programmes we can do, like the Passport Seva project, which was very transformational in nature. We do not get those kind of projects elsewhere.”
TCS has also shown an interest in collaborating with the IndiaAI Mission eventually, once it starts rolling out enterprise grade AI. "We specialise in the contextual knowledge of our customers. Today, a lot of AI ...what has been done is for the public, for the private, and for the public at large," he said.
"Once we start moving into enterprise grade AI... that is where we have a significant role to play, because we have so much of contextual knowledge about all of our customers. That is an area we will definitely play in, along with the government," he added.
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