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

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By Sai Ishwarbharat B and Haripriya Suresh

BENGALURU/MUMBAI (Reuters) – In India Tata Consulting Services (NS:) expects its retail and manufacturing customers in North America to increase spending on technology following similar growth in the banking and financial services segment, a senior executive at the country’s No. 1 software services exporter said.

“We’ve heard good holiday season sales (in the U.S.), which should boost consumer sentiment, and manufacturing has some labor issues,” the CFO said. Sameer (CSE:) Seksaria told Reuters.

“If these three verticals (along with banking) improve overall, we should see a good recovery,” he said.

Sexaria’s cautious optimism underscores broader global economic uncertainties and sticky inflation that have forced customers to keep a watchful eye on technology spending.

The company’s revenue in North America, its biggest market, fell for a fifth consecutive quarter, even as banking and financial services posted their best performance since June 2023.

Retail and manufacturing are the second and fourth largest earners at the $29 billion behemoth.

Last month, Walmart ( NYSE: ) Inc , Amazon.com ( NASDAQ: ) and fast-growing e-commerce sites Shein and PDD Holding’s Temu saw record sales on Black Friday and Cyber ​​Monday.

U.S. online spending also grew nearly 9% to $241.4 billion during the most recent holiday season.

TCS’s communication and media vertical, a capital-intensive segment that is currently one of the laggards for the company, will also see some growth if interest rates start coming down, Seksaria said.

The comments echo CEO Krithivasan’s view that the incoming US administration is likely to remove policy uncertainty and boost customer confidence to spend on discretionary projects.

Its Mumbai-listed shares closed up 5.6 percent on Friday, the biggest one-day gain since July 2024.

TCS also played down concerns about the rise in insurance volumes by multinational corporations through global capability centers (GCCs), potentially reducing work that would have previously been contracted out to IT players.

A growing number of global companies are adding their local offices in India and expanding in-house teams by adding roles such as engineering, cyber security and accounting and finance.India’s GCC market size is estimated to reach $105 billion by 2030.

© Reuters. FILE PHOTO: A man walks past the Tata Consultancy Services (TCS) logo before a news conference announcing the company's quarterly results in Mumbai, India, January 11, 2024. REUTERS/Francis Mascarenhas/File Photo

“There might have been a cost advantage at the beginning, the GCCs are now seen as global cost savings centers. But as things begin next year, cost containment and cost productivity continues to be cyclical for the GCCs.” the issue of opening and closing,” said Seksaria.

2023 Infosys (N.S.) acquired the wing in captivity Danske Bank (CSE:) and before that TCS acquired the 1,500-employee unit of Post Bank AG in late 2020.



 
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