Tata Consultancy Services Ltd (TCS) has for the first time quantified the substantial revenue contribution from its cutting-edge technology services. The Indian IT giant announced that it now earns an annualized $11 billion from disruptive new-age services, with a significant $1.5 billion stemming specifically from artificial intelligence (AI) engagements. This disclosure was made by CEO and Managing Director K. Krithivasan during the company's annual investor day on Wednesday, 18th December 2025.
Breaking Down the New-Age Revenue Stream
Krithivasan emphasized that when traditional services like application development and maintenance (ADM), testing, and business process services (BPS) are excluded, the remaining portfolio of modern technologies constitutes nearly $11 billion. He noted that all these segments are expanding at a pace faster than the company's average growth rate. This move to break out revenue from high-growth areas marks a strategic shift for TCS, which has historically been conservative in such disclosures.
The CEO positioned generative AI not merely as another technological wave but as a fundamental shift. He argued that its scale, speed of impact, and potential benefits distinguish it from previous disruptions like the move to PCs or the internet. TCS, he stated, has historically turned such transitions into accelerators for growth.
Strategic Bets and the Accenture Comparison
Under Krithivasan's leadership, TCS is making bold investments to secure its future. In a significant infrastructure push, the company committed $6.5 billion over six years to build 1 GW of data centre capacity. Furthermore, in partnership with private equity firm TPG, it is investing $1 billion in a new data centre in Navi Mumbai.
The acquisition strategy has also seen a revival. After a long period of caution, TCS has agreed to spend $773 million to acquire two firms: digital marketing services company ListEngage MidCo for $73 million and technology consulting firm Coastal Cloud for $700 million.
However, TCS's $1.5 billion AI revenue figure invites comparison with global rival Accenture, which reported $2.7 billion from its 'advanced AI' business last year. An important distinction lies in the definitions. Accenture's chair and CEO Julie Sweet clarified that their number includes only Gen AI, agentic AI, and physical AI, excluding classical AI and data services. TCS has not yet detailed its own AI revenue classification.
Market Pressures and Growth Challenges
The disclosures come at a time when TCS faces significant headwinds. The company's shares have been the worst performer among India's top four IT firms this year, falling 21.47% since January to close at ₹3,217 on Wednesday. In contrast, Infosys, HCL Technologies, and Wipro saw declines of 14.8%, 13.76%, and 13.54%, respectively.
Analysts suggest the new revenue metrics are partly a signal to shareholders. Phil Fersht, CEO of HFS Research, stated that with growth under pressure and traditional metrics like headcount losing relevance in an AI-driven model, companies need new proof points to demonstrate future relevance.
Growth has slowed, with TCS reporting under 5% full-year revenue growth for the past two years. Challenges include a lack of mega-deals and client attrition. The company lost several large contracts, including the Zurich Life Insurance deal to DXC Technology and the Phoenix Group account to Wipro, each valued over $500 million. It is also undergoing a retrenchment exercise, planning to let go of about 12,000 employees, or 2% of its workforce.
Despite this, a recent win offers a bright spot: a $1 billion deal with Telefónica UK. However, brokerages like Kotak Institutional Equities and Motilal Oswal still anticipate a potential full-year revenue decline for the company.
During the investor day, TCS's management sought to reassure investors, affirming that it does not plan to lower its aspirational profitability target of 26-28% and that generative AI presents an opportunity rather than a threat to its outsourcing services.
