Tata Consultancy Services expects a boost from retail and manufacturing sectors, following a strong banking sector performance and positive U.S. consumer sentiment.
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| TCS sees potential for retail and manufacturing sectors in North America to recover, backed by U.S. consumer spending, labor gains, and improving economic conditions. Image/ Illustration: ChicHue |
Bengaluru, India — January 12, 2025:
Tata Consultancy Services (TCS), India’s largest software services exporter, expects a boost in tech spending from its North American retail and manufacturing clients, following a strong recovery in its banking and financial services segment.
CFO Samir Seksaria highlighted optimism after hearing of strong holiday season sales in the U.S., which could improve consumer sentiment. He also pointed out that manufacturing had resolved some of its labor challenges. He believes that if these sectors, along with banking, see sustained growth, TCS could experience a broader recovery.
However, Seksaria tempered his optimism by acknowledging ongoing global economic uncertainties and persistent inflation, which have led clients to restrain tech spending. Despite strong performance in banking and financial services, TCS’s revenue in North America, its largest market, has fallen for five straight quarters.
Retail and manufacturing, TCS’s second- and fourth-largest revenue sources, are expected to follow the recovery trend. Strong Black Friday and Cyber Monday sales from major retailers like Walmart, Amazon, and fast-growing platforms like Shein and Temu, along with a nearly 9% rise in U.S. online spending, offer signs of optimism.
Seksaria also pointed to TCS’s communications and media segment, which could see an uptick if interest rates decrease. This aligns with CEO Krithivasan’s view that reduced policy uncertainty from the U.S. administration would encourage clients to invest in discretionary projects.
TCS’s shares rose 5.6% on Friday, marking their highest single-day gain since July 2024. The company also downplayed concerns over the rise of insourcing by multinational corporations, which could reduce outsourcing opportunities for IT firms.