TCS, a leading global IT services and consulting company, recently announced its Q3 results, revealing a nuanced picture of growth and challenges in the evolving technology landscape. The company’s performance highlights the complexities of navigating a global market while concurrently investing in future-focused technologies like artificial intelligence. understanding these dynamics is crucial for anyone invested in the IT sector, or simply observing the trends shaping the future of work.
TCS Q3 Performance: A Detailed Look
the latest quarterly report indicates a modest 0.5 percent sequential growth in international markets. However, achieving a higher constant-currency growth rate for fiscal year 2026, compared to the 0.9 percent seen in fiscal year 2025, now presents a significant hurdle.I’ve found that consistent, robust growth in this sector requires not just maintaining existing momentum, but proactively adapting to shifting market demands.
When excluding revenue from pass-through sales – which essentially represents costs billed directly to clients - the core business experienced a constant-currency growth of just 0.3 percent sequentially. This suggests underlying pressures impacting organic growth.
Geographically, performance varied considerably. North America saw a slight sequential increase of 0.1 percent, while Latin America demonstrated stronger expansion at 4.6 percent. Conversely, the UK experienced a 1.9 percent decline, and Europe grew by 2.1 percent. India, while showing an 8 percent sequential growth, witnessed a substantial 34.3 percent year-over-year revenue decrease. This highlights the importance of diversified market strategies.
Looking at year-over-year figures, north America grew 1.3 percent, the UK declined 3.2 percent,and continental Europe saw a 1.4 percent rise. These figures underscore the uneven global recovery and the impact of regional economic conditions.
Within TCS’s key business verticals, the Banking, Financial Services, and Insurance (BFSI) sector, its largest, grew 1.6 percent year-over-year but contracted by 0.4 percent sequentially. The consumer business faced a 2.7 percent year-over-year decline, though it did show a 1.3 percent sequential increase. Life sciences and healthcare, though, demonstrated positive momentum, growing 0.9 percent sequentially and 2.2 percent year-over-year.
Here’s a swift overview of the key performance indicators:
| Metric | Q3 Performance |
|---|---|
| International Market Growth (Q-o-Q) | 0.5% |
| core Business Growth (Q-o-Q) | 0.3% |
| North America Growth (Q-o-Q) | 0.1% |
| India Growth (Y-o-Y) | -34.3% |
| BFSI Growth (Y-o-Y) | 1.6% |
Did you Know? According to a recent report by Gartner (December 2023), global IT spending is projected to reach $4.7 trillion in 2024, a 6.8% increase from 2023.
The Rise of AI and its Impact on TCS
TCS is strategically focusing on artificial intelligence (AI) to drive future growth.Aarthi Subramanian, executive director and president, explained that the company’s $1.8 billion in annualised revenue from AI programs encompasses both AI-driven business change initiatives and the modernization of existing systems. This dual approach is designed to capture a broad spectrum of opportunities within the AI revolution.
The company is concentrating on two primary types of AI programs: those designed to fundamentally transform businesses across various industry value chains, and those focused on leveraging AI to modernize existing infrastructure and processes.Here’s what works best: integrating AI into both new and existing projects ensures a extensive approach to innovation.
