TCS CEO calls Street "wrong" on AI threat; posts $40-bn order book and $2.3 billion in AI revenue for FY26

Tata Consultancy Services CEO K Krithivasan had a clear message for sceptics questioning whether India's IT giants can thrive in an AI-first world: "I believe the Street is wrong." In a wide-ranging post-results conversation, TCS's top leadership made the case that the company is not just surviving the AI transition — it is actively driving it for the world's largest enterprises.

Why TCS says the SI model is far from dead

The dominant market narrative over the past two quarters has been one of revenue deflation — the fear that AI-driven automation will hollow out the bread-and-butter services work that IT majors depend on. Krithivasan dismantled this argument on three counts: enterprises need system integrators (SIs) to contextualise new technology within their existing operations; any productivity gains unlocked by AI get immediately channelled into a backlog of transformative work; and someone has to reimagine the underlying business processes that AI is meant to improve.

Three pillars driving enterprise AI spend

COO Aarthi Subramanian described FY26 as the year AI crossed from pilot projects into mainstream enterprise adoption. She outlined three distinct spending buckets she is seeing across client conversations. The first is run-efficiency — using a "human plus AI" operating model to cut costs in day-to-day operations, with savings then ploughed back into transformation. The second is enterprise modernisation: upgrading legacy systems, migrating to cloud (she noted that roughly half of enterprises are still not on cloud), building data platforms, and strengthening cyber security. The third — and newest — pillar is AI transformation itself: building agentic applications tailored to specific business or manufacturing contexts.

Even if you have a great AI ecosystem, someone has to help you reimagine the business process and make AI work for you.

-K Krithivasan, CEO & MD, TCS

"What was earlier postponed for a later date, customers want to take those decisions now," Subramanian said, pointing to legacy modernisation as an area where urgency has notably increased despite broader geopolitical uncertainty.

FY27 outlook: bullish, with a salary hike to match

With a strong pipeline, three freshly signed mega deals, and four new clients crossing the $100 million annual revenue threshold, Krithivasan indicated TCS aims to surpass its 4.6% constant currency growth for FY26 in the coming year. The company has also announced a return to its standard salary increment cycle — a signal, Krithivasan said, of wanting to reward employees who could not receive increases last year, and an implicit vote of confidence in the demand environment ahead.