May 28, 2025 3:33 pm
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TCS Anticipates Retail and Manufacturing Recovery After Banking Resurgence

India’s Tata Consultancy Services (TCS), the nation’s leading software services exporter, expects a rebound in tech spending among its retail and manufacturing clients in North America. This follows a recent recovery in its banking and financial services segment, according to Chief Financial Officer Samir Seksaria.

“We’ve observed strong holiday season sales in the U.S., which could boost consumer confidence. Additionally, some labor challenges in manufacturing seem to be resolving,” Seksaria told Reuters. “If these three sectors—banking, retail, and manufacturing—show overall improvement, we can expect a solid recovery.”

While optimistic, Seksaria acknowledged the challenges posed by global economic uncertainties and persistent inflation, which have prompted clients to curtail their technology budgets.

In North America, TCS’ largest market, revenue declined for the fifth consecutive quarter, although its banking and financial services division recorded its best performance since mid-2023.

Retail and manufacturing are TCS’ second- and fourth-largest revenue streams, respectively. Recent strong sales figures from companies such as Walmart, Amazon, Shein, and Temu during Black Friday and Cyber Monday signal potential growth in these sectors. U.S. online spending also increased by nearly 9%, reaching $241.4 billion during the holiday season.

Seksaria also noted that TCS’ communications and media segment, currently underperforming, could benefit if interest rates start to decline. This aligns with TCS CEO K. Krithivasan’s prediction that reduced policy uncertainty under the incoming U.S. administration may encourage clients to invest in discretionary projects.

On Friday, TCS shares listed in Mumbai surged by 5.6%, marking their highest single-day gain since July 2024.

TCS addressed concerns about the growing trend of insourcing by multinational corporations through global capability centers (GCCs), which might reduce outsourcing opportunities for IT service providers.

Many global companies are expanding their in-house operations in India, establishing GCCs to handle roles like engineering, cybersecurity, and finance. India’s GCC market is projected to grow to $105 billion by 2030.

“While GCCs may initially offer cost advantages, sustaining those benefits and ensuring cost productivity over the long term will be challenging,” Seksaria explained. “This cyclical pattern of opening and shutting GCCs is something we’ve seen before.”

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