India’s TCS expects retail, manufacturing revival after banking recovery

Bengaluru: So, TCS, which is a big player in the software services game, is feeling pretty optimistic. They think that retail and manufacturing clients in North America are going to start spending more on tech. This comes after a nice bounce-back in the banking sector.

Their CFO, Samir Seksaria, mentioned that good holiday sales in the U.S. could really lift consumer spirits. Plus, it seems like some of the labor issues in manufacturing are getting sorted out. If these sectors pick up, along with banking, TCS is hoping for a solid recovery.

But, it’s not all sunshine and rainbows. There are still some global economic worries and inflation that have clients being a bit cautious with their tech budgets. TCS has seen its revenue in North America drop for five quarters straight, even though banking services are doing better than they have since last June.

Retail and manufacturing are super important for TCS, making up a big chunk of their revenue. Recently, companies like Walmart and Amazon had record sales during the holiday season, which is a good sign. Online spending in the U.S. also jumped nearly 9% this holiday season.

Seksaria also pointed out that if interest rates go down, TCS’s communications and media sector might see some improvement too. He echoed the CEO’s thoughts that the new U.S. administration could help clear up some policy uncertainties, making clients more willing to invest in new projects.

On a positive note, TCS’s shares jumped 5.6% recently, marking their biggest single-day rise since July 2024. They’re not too worried about the trend of companies bringing jobs in-house, as many global firms are setting up local offices in India and expanding their teams.

Seksaria mentioned that while there might be some initial cost benefits to this trend, the real challenge will be maintaining those costs over the long haul. It’s a bit of a rollercoaster with these global capability centers, and they keep opening and closing.

In recent years, we’ve seen companies like Infosys and TCS making moves to acquire other firms, which shows they’re still looking to grow and adapt in this changing landscape.