IT major TCS turns to home turf as it looks to redraw revenue map

Sets up vertical to focus on high-growth markets

India’s largest information technology (IT) services provider, Tata Consultancy Services (TCS), is recalibrating its strategy to capitalise on high-growth markets while managing global economic uncertainties. By focusing on India and other emerging geographies, the company aims to strengthen its presence in regions ripe for significant IT expansion. 

 

TCS has introduced a dedicated vertical, New Growth Markets (NGM), to spearhead this initiative. The NGM segment will oversee operations in key regions including India, Latin America, the Middle East, Africa, the Asia-Pacific, New Zealand, and Australia. Girish Ramachandran, formerly head of the Asia-Pacific region, has been appointed president of growth markets and public services to lead this initiative.  

Ramachandran will be supported by Tej Paul Bhatla, senior vice-president and business head for public services inIndia, and Ujjwal Mathur, president of India business and strategic accounts for growth markets. Both will report directly to Ramachandran. 

An email seeking comments from TCS remained unanswered until press time.  

 

“As a group, there is a realisation that India is going to be big for the company,” said a source familiar with the strategy. “This was also part of the focus at Blitz 2024, where (chairman of Tata Sons) N Chandrasekaran highlighted India as a priority.”

 

Blitz is TCS’s annual leadership conference and planning event that outlines its strategic roadmap.  

At the end of FY24, India contributed 5.6 per cent to TCS’s overall revenue, amounting to Rs 13,562 crore (approximately $1.6 billion). Over the past 18 months, the company’s India revenue has reached Rs 23,977 crore ($2.9 billion). TCS leadership has set its sights on more than doubling these figures in the near term.  

This ambition was echoed by TCS managing director and Chief executive officer, K Krithivasan, in an interview with Business Standard following the Q1FY25 results. “In India, we have both government and non-government segments. We have participated with the government on large public services projects at scale. Other than the government, we work with almost all the large public-sector banks. In India, we have been exposed to the BFSI (banking, financial services, and insurance) sector more, but the focus now is to go beyond this segment. That is where more investment is happening.” 

Krithivasan also noted the broader significance of emerging markets beyond India. “Emerging market is not just an India story. We have won deals in the Asean countries and this is not just Singapore and Hong Kong. We have done some significant work in Malaysia and Thailand, and are expanding very well.” 

Emerging markets have outperformed major economies for TCS, a trend reflected in its FY24 results. India’s revenue grew 20.3 per cent year-on-year, while Latin America saw a 21.1 per cent increase. The Middle East and Africa rose by 14.8 per cent, and the Asia-Pacific region grew by 4 per cent. In comparison, the US posted a modest 2.3 per cent growth, while the UK grew 17.7 per cent.  

India’s growth momentum has continued into FY25. In Q1, Indian operations grew by 61.8 per cent year-on-year in constant currency terms, accelerating further to 95.2 per cent in Q2, driven primarily by the ramp-up of a significant deal with Bharat Sanchar Nigam Limited (BSNL). 

 

A recent Gartner report underlines this optimism, forecasting a 17 per cent rise in software spending and an 11.4 per cent growth in IT services spending in India. The report attributes this expansion to increased demand for advanced technologies, including generative AI (GenAI).  

 

This shift in tech spending is also happening due to Indian businesses desire to adopt the latest in tech, including generative AI solutions. “In 2025, Indian chief information officers (CIOs) will start allocating budgets for GenAI beyond initial proof-of-concept projects,” said Naveen Mishra, VP Analyst at Gartner. “Additionally, Indian CIOs are expected to significantly boost spending on technologies such as cybersecurity, business intelligence, and data analytics in 2025 compared to 2024.”