TCS CEO K Krithivasan betting on strong FY26 deal wins to fuel growth in FY27

TCS CEO K Krithivasan

• TCS expects FY26 deal pipeline of $38-39 billion, boosting growth for FY27
• AI revenue rose 17.3% QoQ to $1.8B, boosted by scaled implementations.
• Net profit dropped 14% YoY due to charges; revenue increased by 5%.

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Tata Consultancy Services (TCS) chief executive officer and managing director K Krithivasan expects to close the fiscal with a deal pipeline of around $38-39 billion, setting the stage for growth in FY27.

In the December quarter, the company reported $9.3 billion in deal total contract value (TCV), surpassing analyst estimates of $7-9 billion.

Speaking at the company’s earnings conference on January 12, Krithivasan said, “If this trend continues, we will be somewhere closer to about $38-39 billion for the year, which will be one of the highest. We believe this order book will help us in growing in FY27 as well. We are now quite comfortable with the order book itself.”

This comes at a time when the IT services industry globally continues to face geopolitical headwinds, bear the brunt of US tariffs, H-1B visa policy changes and Fed rate cuts to name a few.

“As far as Q4 international revenue is concerned, we are optimistic and we will take every step that is required to see we reach the aspiration of having a revenue better than FY25,” the CEO said.

TCS announced around eight deals during the quarter, the highest among Tier-I IT players, despite the October-December period being a seasonally weak quarter amid holidays in the US and furloughs.

Some of the key deal wins include a five-year contract with SAP for four Centers of Excellence for Gen AI, customer experience, cloud; a digital transformation deal with British food retailer Morrisons; a five-year partnership with Tata Motors and expansion of its 15-year old partnership with UK insurance company Aviva.

AI growth engine

TCS reported steady AI revenue growth at $1.8 billion in annualised revenue, growing 17.3 percent QoQ, outpacing muted growth across verticals.

The demand was largely driven by customers’ continued investments in cloud, data, cyber and enterprise transformations to build readiness for AI.

“The growth momentum we witnessed in Q2FY26 continued in Q3FY26. We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy,” Krithivasan said.

At the earnings conference, the CEO said that until mid-2024, most of the AI work was experimentation or proof of concepts (PoCs) as clients tried to understand the technology better. But in 2025, that shifted quickly as customer adoption and moving PoCs into production increased significantly.

“We have now shifted from experiment POCs and pilots to really ROI led, scaled implementations, and that's what is driving this growth. And agentic AI getting introduced early in 2025 also created good momentum,” he said.

TCS Q3 results

TCS reported a sharp year-on-year decline in net profit, weighed down by large exceptional charges linked to restructuring, labour law changes and a long-running US legal dispute. However, the IT major posted steady sequential growth and announced a hefty dividend.

Consolidated net profit fell 14 percent on-year to Rs 10,657 crore, sharply below Street expectations. Revenue rose 5 percent to Rs 67,087 crore, broadly in line with expectations.

Excluding exceptional items, TCS reported net profit of Rs 13,438 crore, up 8.5 percent year-on-year, which showed that the headline profit decline was driven largely by one-off costs rather than operating weakness.