TCS Q4: CEO K Krithivasan says 'AI for business' gaining traction

A third of the company's client engagements include AI and generative AI applications to accelerate project outcomes

By Harichandan Arakali Forbes India Staff

Published: Apr 11, 2025 12:05:28 PM IST

K Krithivasan, chief executive officer of Tata Consultancy Services Ltd., speaks during a Q4 earnings news conference in Mumbai, India, on April 10, 2025. Image: Indranil Aditya/NurPhoto via Getty Images

Tata Consultancy Services crossed the $30 billion mark in annual revenues for the fiscal year that ended March 31, and signalled that AI projects are picking up. However, the Mumbai-headquartered global IT and consulting company didn’t offer any positive surprises to analysts with its latest quarterly numbers on April 10.

The company, as widely anticipated, reported a sequential decline in quarterly revenue for the Jan-March period, largely on cutbacks and delays in its biggest markets, as US President Donald Trump’s tariff wars ratcheted up the global macroeconomic uncertainty. TCS’s fiscal Q4 profits also fell versus the same period last year. Shares were little changed in early Mumbai trading this morning.

While TCS doesn’t provide any quantitative projections, CEO K Krithivasan did field some analyst questions about the possibility that FY26 will likely be better than FY25 on the company’s earnings call. In his conversations with customers, clients are hoping that some of the tariff and trade policy related uncertainties will be resolved quickly enough, so that some investments in tech can resume, he said.

At TCS itself, the company “saw a second consecutive quarter of very strong TCV, which consisted of a good mix of large, medium and small deals, which augurs well for future revenue visibility,” he said. He was referring to total contract value (TCV) of all the contracts signed during the three months ended March 31. This was a record $12.2 billion despite the “absence of mega deals”, Krithivasan said.

The chief executive also provided some qualitative commentary on demand for AI and generative AI projects.

“AI and gen AI is gaining a lot of traction and momentum,” he told the analysts. While the immediate focus in many places has been on applying AI to IT systems to improve productivity and save money, which he described as ‘AI for IT’, prospects for ‘AI for business’ are also looking up.

“AI for business is picking up a lot of traction. People are trying to see which are the use cases in the entire value chain where they can deploy AI to improve customer experience, speed”, and so on, he said.

He offered some examples of the type of AI projects the company is working on.

For a large North American utility company TCS is designing a machine learning-based model to improve a manual inspection process involving 5000+ circuits, 50,000 circuit mains, and more than 1.6 million individual trees around that infrastructure, he said.

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TCS’s solution will bring together data from sources including LiDAR, satellite imagery, weather patterns, vegetation characteristics, wildfire incidents and so on. The model is expected to improve tree trim inspection, trim prescriptions, budgeting, forecasting, and yearly risk prediction including better management of wildfire instances.

For a European energy and digital services company, TCS is building AI solutions for faster audits of client energy consumption data, aiding decarbonisation efforts, an AI assistant for fire and safety field engineers to access multilingual fire safety protection standards from thousands of documents, an AI assistant to review contracts and provide risk related recommendations, and a voice assistant for service desk transformation, Krithivasan read out from his prepared statement to analysts.

TCS has deployed agentic AI to design a unified supply chain insights provider for a US biopharma client, providing self-service access to holistic insights tapping multiple sources. These sources include structured and unstructured data sets and new articles.

For a global OTT and big tech company, TCS built a generative AI-based movie script analyser, to surface insights based on viewership data, movie scripts and content, the company said in its earnings press release.

In FY25, TCS also improved software engineering by applying AI to the processes. “Over a third of our client engagements use AI/GenAI for accelerated project outcomes and high quality,” the company said in the press release. For a global financial services company, TCS is using a combination of generative AI and its own proprietary solution Mastercraft to migrate over 50 million lines of COBOL code to Java.

For now, the size and scope of most of these projects seem to be limited—in comparison with the massive scale of TCS’s traditional outsourcing work—although clients are looking to go beyond experimentation and pilots into real-world deployments. There are also trade-offs like gains from AI being shared back with clients, or some AI projects being funded from savings from other deployments and so on.

Clients’ IT budgets remain “flat”, the CEO said. They are finding money for incremental tech upgrades only via savings from various ongoing projects.

The traditional outsourcing work of helping customers reduce their ‘technology debt’ (meaning, modernising their IT systems with new, often cloud-based software and so on) is expected to “gain steam once people have more visibility and certainty on the medium to long term,” Krithivasan said.