India's TCS posts slim quarterly revenue beat on AI demand, North America growth

Core Insights - Tata Consultancy Services (TCS) reported third-quarter revenue of 670.87 billion rupees ($7.44 billion), slightly exceeding analyst expectations of 666.76 billion rupees, driven by AI demand [1][2] - The North America market, which constitutes nearly half of TCS's revenue, experienced growth for the first time in two years, indicating a potential recovery in demand [3] Financial Performance - TCS's consolidated revenue increased by 4.9% year-over-year [1] - The company's net profit fell by 14% to 106.57 billion rupees, missing analyst estimates of 130.24 billion rupees, attributed to one-time restructuring costs and legal expenses [5] - TCS's total order book decreased to $9.3 billion from $10.2 billion a year ago, despite announcing eight deals in the quarter, the highest among India's top-five IT firms [6] Market Dynamics - AI services generated $1.8 billion in annualized revenue, accounting for approximately 5.8% of TCS's overall revenue [2] - Five out of eight geographical markets showed growth, with the Middle East Asia growing by 8.3% and Continental Europe by 3.5% [2] - Clients in the IT industry remain cautious about tech spending due to macroeconomic uncertainties, including U.S. tariffs and visa fee challenges [4]