India’s TCS expects it’s retail and manufacturing clients

India's TCS expects it's retail and manufacturing clients Image/Reuters

VoM News Desk | January 12, 2025 | 12:52 PM IST | Breaking News | Follow on Google News

India’s TCS expects it’s retail and manufacturing clients

BENGALURU/MUMBAI, Jan 12 (Reuters) – India’s Tata Consultancy Services (TCS.NS), opens new tab 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 U.S.) that should boost consumer sentiment and manufacturing has some of the labour issues behind them,” CFO Samir Seksaria told Reuters.

“If these three verticals (along with banking) improve overall, we should see a good recovery,” he said.

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.

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Last month, Walmart Inc (WMT.N), Amazon.com (AMZN.O),, and fast-growing e-commerce sites Shein and PDD Holding’s (PDD.O), Temu, saw record-breaking sales on Black Friday and Cyber Monday.

U.S. online spending too rose nearly 9% 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 CEO Krithivasan’s sentiment that the incoming U.S. 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%, its highest single day rise since July 2024.

TCS also played down concerns over the rise in insourcing by multinational corporations through global capability centres (GCCs), potentially slashing work that would have been contracted to IT players in the past.

A growing number of global companies are increasing their local offices in India and expanding in-house teams, adding roles such as engineering, cybersecurity and accounting and finance. India’s GCC market size is estimated to reach $105 billion by 2030.

“Initially, there could a cost advantage, probably GCCs are right now being seen as global cost saving centers. But as things go into next year, maintaining cost and delivering cost productivity in a 3-year to 7-year period is where the cyclicality of opening and shutting of GCCs keeps coming,” said Seksaria.

In 2023, Infosys (INFY.NS), acquired the captive arm of Danske Bank (DANSEN.UL) and before that TCS acquired Post Bank AG’s unit of 1,500 employees in late 2020.

(Except for the headline, this story has not been edited by VoM News staff and is published from the syndicated feed)

VoM News Desk

VoM News is an online web portal in jammu Kashmir offers regional, National & global news.