Stock: TCS Lifts Street Spirits with AI-first Play in Market Gloom

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TCS disclosure on “scaling AI capabilities, strengthening partnerships and maintaining financial discipline provides comfort on both growth and profitability.”

By S JHA

Mumbai, December 18, 2025 — On a day when the market dipped further down, TCS brought cheers on the street. Bulls rode the IT scrips to save bourses from bloodbath. TCS shined the spotlight on the IT sector on Thursday.

“TCS, on its Investor Day, stated that it is moving to an AI-first enterprise model, positioning AI as a long-term structural opportunity rather than a short-term technology cycle,” said ICICI Direct in its research note.

The brokerage stated that “management disclosed annualised AI services revenue of around US$1.5 billion, growing 38% YoY in constant currency and forming about 5% of overall revenue.” “The company also shared that its annualised new-age revenues, including AI, cloud and cybersecurity, stand at US$11 billion, with growth running ahead of company averages,” added the brokerage.

It also stated that “TCS outlined five focus areas for its AI strategy, covering internal adoption, Human plus AI service delivery, talent readiness, client-facing AI solutions and ecosystem partnerships.”

“Management reiterated its financial framework, including long-term margin aspirations of 26–28%, strong cash generation, high return ratios and a disciplined capital allocation approach,” added the research note.

On its rationale, the brokerage argued that “TCS clearly communicated that AI is central to its long-term growth plans. The company aims to move beyond project-based AI adoption and position itself as a long-term transformation partner for clients.”

It further noted that the focus of TCS on “scaling AI capabilities, strengthening partnerships and maintaining financial discipline provides comfort on both growth and profitability over the medium term.” “The disclosures help improve visibility on how AI is already contributing to revenues and how management plans to build on this opportunity in a structured manner,” it added.

Shares of TCS gained over two percent on Thursday. Infosys, Wipro, and Tech Mahindra also gained on Thursday.

(Disclaimer: This article makes no recommendation for buy or sell of shares of any company)