By Sai Ishwarbharath B and Haripriya Suresh
BENGALURU/MUMBAI (Reuters) – India’s Tata Consultancy Services expects its retail and manufacturing clients in North America to step up spending on tech, following the same upturn in its banking and financial services segment, a top executive of the nation’s No. 1 software-services exporter, said.
“We’ve got heard about good holiday season sales (within the U.S.) that ought to boost consumer sentiment and manufacturing has among the labour issues behind them,” CFO Samir Seksaria told Reuters.
“If these three verticals (together with banking) improve overall, we must always see an excellent recovery,” he said.
Seksaria’s cautious optimism highlights broader global economic uncertainties and sticky inflation which have forced clients to maintain a leash on tech spending.
The corporate’s revenue in North America, its largest market, declined for the fifth consecutive quarter at the same time 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.
Last month, Walmart Inc, Amazon.com, and fast-growing e-commerce sites Shein and PDD Holding’s Temu, saw record-breaking sales on Black Friday and Cyber Monday.
U.S. online spending too rose nearly 9% to $241.4 billion throughout the recent holiday season.
TCS’ communications and media vertical, a capital-intensive segment that’s currently one in all the corporate’s laggards, may also see some pickup if rates of interest begin to go down, Seksaria said.
The comments echo CEO Krithivasan’s sentiment that the incoming U.S. administration is more 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 may have been contracted to IT players up to now.
A growing number of world corporations are increasing their local offices in India and expanding in-house teams, adding roles corresponding to engineering, cybersecurity and accounting and finance. India’s GCC market size is estimated to achieve $105 billion by 2030.
“Initially, there could a price advantage, probably GCCs are straight away being seen as global cost saving centers. But as things go into next 12 months, 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.