New US govt will bring certainty on policies, drive discretionary spending: TCS CEO

K Krithivasan, CEO and MD, TCS

India’s largest IT software exporter Tata Consultancy Services (TCS) is bullish on the new US government led by president Donald Trump reviving discretionary spending as customers will get more clarity on policies.

Trump’s swearing in ceremony set to happen January 20. North America overall is a major market for TCS, nearly 50 percent of its revenue coming from the region.

Moreover, after nearly years of demand slowdown, North America has slowly started to revive in the second half of FY25. TCS CEO and MD K Krithivasan highlighted that the company reported a strong order book in the quarter ended December 31 driven by new deals wins in North America and the BFSI sector.

Speaking at the company’s Q3 earnings conference in Mumbai on January 9, Krithivasan said, “Our deal bookings have been good, particularly in banking, financial services (BFS) and in North America. Once the new administration comes in, that will also remove any uncertainty because once the policies become clear the lack of direction would be removed or so we hope.”

“All of them put together, we see there would be more confidence and discretionary programs coming into next financial year,” he added.

TCS’ order book closed at $10.2 billion in Q3. Key verticals like BFSI accounted for $2.2 billion in bookings, consumer business brought $1.3 billion in deal bookings and North America saw $5.9 billion in deal wins. The management said that the strong order book in Q3 is giving them “confidence and comfort on outlook for the future.”

Krithivasan said that while the softness continued in Q3 due to macro factors and seasonal weaknesses from furloughs, but based on the order booking and conversations with customers, he is expecting discretionary spending to increase.  He added that calendar year 2025 was certainly better than 2024 in terms of business revival.

TCS reported consolidated net profit at Rs 12,380 crore, a rise of 12% when compared to Rs 11,058 crore in the year-ago period, thus beating estimates marginally.

The company's consolidated revenue from operations rose 6% to Rs 63,973 crore in Q3FY25 from Rs 60,583 crore in Q3FY24, thus missing estimates. On a sequential basis, the IT major's net profit rose 4 percent.

A Moneycontrol poll of seven brokerages pegged TCS’ October-December net profit at Rs 12,308 crore, and revenue at Rs 64,218 crore.