Executives say the sector will not die by 2030; firms like TCS will be essential to maximize AI value amid a gap between AI technology and enterprise adoption.

Despite macrouncertainties, demand for AI-enabled transformation remains strong, with continued deal activity and a robust pipeline.

TCS reported a 2.4% revenue dip for FY26, but points to momentum in the following quarters, a strong international base, and an order book of large deals totaling $40.7 billion in value.

Clients are increasingly confident in investing in AI projects, with several mega deals signed recently, and Gulf-region exposure remains limited unless the situation worsens.

AI-enabled coding tools are driving productivity gains of 15-30%, contributing to efficiency and potentially deflating legacy contracts as services are optimized.

Overall AI-led productivity gains are shaping revenue from AI engagements to exceed $2.3 billion annually.

AI-driven improvements in coding and IT operations are helping deflate existing contract pricing, a trend TCS expects to offset by winning new projects.

Geopolitical tensions pose limited risk to TCS, which maintains resilience if regional issues remain contained.

TCS remains optimistic on FY27, citing a strong order book and growth in international revenues despite macro risks.

Recent acquisitions—Coastal Cloud for $700 million and ListEngage for $73 million—are part of a strategic push to scale and accelerate capabilities, not just top-line growth.

Bundled, large-scale transformation deals are becoming more common as clients seek integrated solutions, with AI driving IT operations productivity and transformation activity.

The IT services outlook remains positive as AI accelerates, with Indian firms like TCS arguing that deep skill sets, not just cost arbitrage, will keep the sector relevant and resilient.