Tata Consultancy Services (TCS) saw its count of $100 million-plus clients decline from 64 in Q4 FY25 to 62 in Q1 FY26, marking a five-quarter low. However, the total order book still reached $9.4 billion, signaling resilience despite macro challenges
📉 4 Strategic Insights
1️⃣ Shift to smaller AI & GenAI projects
Amid cautious large-scale spending, TCS is pivoting toward shorter, targeted projects—especially in generative AI. Its $1 million-plus client base hit an all-time high of 1,336, up 26 YoY
2️⃣ Resilient deal pipeline
Despite fewer mega clients, the company secured a $9.4B order book, up from $8.3B last year. This highlights strong demand in diversified segments .
3️⃣ Revenue impacted by macro trends
TCS’s constant-currency revenue fell 3.1% YoY to ₹63,437 crore (~$7.4B), driven by client hesitancy and global economic uncertainty. But margins held firm at ~24.5%
4️⃣ Balanced portfolio cushions risks
CEO K Krithivasan stressed that TCS isn’t a “one-trick pony,” citing diversification beyond its BSNL network deal. He emphasized balanced growth across verticals, especially AI, and no market-share loss
🔭 What to Watch
- Client composition next quarter: Will AI-boosted smaller deals continue to offset loss of larger engagements?
- Deal conversion pace: Can the strong order book sustain revenue momentum?
- Macro environment: Ongoing tariff uncertainties and geo-risks, especially in U.S. and Europe, remain key variables Moneycontrol
✅ Bottom Line
TCS’s dip to 62 $100M+ clients reflects slowing large-transformation projects. Yet, its record smaller-client growth and $9.4B order book show a strategic shift toward AI-driven, mid-tier engagements. With stable margins and a diversified portfolio, TCS is adapting to evolving demand while navigating macroeconomic headwinds.
