According to the latest Q3 FY 2023-24 results, the IT Giant Tata Consultancy Services (TCS) secured a total of $8.1 billion deal without mega deal support and showing broad-based success. TCS said that four generative AI deals have turned from PoC to contract, but there is no effect on revenue because of it yet.
“All deals are progressing as planned,” said Chief Operating Officer, N Ganapathy Subramaniam.
He also expressed a cautious outlook on generative AI, stating, "I don’t think generative AI is impacting [our revenue] at this time. Clients are trying to see what benefit it can bring. All are small projects. It’s not leading into our TCV."
When it comes to jobs, "Depending on the overall condition, the investments we make, and driving efficiency, if the headcount has to become less, then be it," said Milind Kakkad, chief HR Officer saying that if TCS has to reduce the headcount, it might choose to do so depending on the market.
On the other hand, he also said that TCS continues its plans to hire 40,000 freshers in 2024 and it stands by the number. He also said that they hired a lot of freshers in this quarter.
TCS reported a total employee count of 603,305. The attrition rate for IT services decreased to 13.3% over the last twelve months, down from 14.9% in the previous quarter.
The partnership with NVIDIA is progressing as planned, with 14,000 employees trained on leveraging the architecture. The team is also planning to increase the speed of training. A lot of the projects developed by TCS are also being offered as small services to the clients.
The company also showcased growth in emerging markets, specifically 23.4% in India. The company also filed 83 patents in the quarter.
TCS reported a Q3 marked not much information about generative AI, despite a 4% YoY growth at Rs 60,583 crore in total revenue. Generative AI, although advancing into production with four projects, has not yet demonstrated a substantial impact on the company's overall revenue.
The company says that it is moving into a situation where its clients are comfortable with generative AI, and are trying the technology in different ways. While deals in generative AI are in progress, their timing remains uncertain, and their impact on revenue is yet to be realised.
However, the company's cautious stance on the potential impact of generative AI raises questions about its contribution to future revenue growth, as no commitments have been made in terms of investments. Though the company has previously announced major partnerships with Microsoft and Google, the pace is still slow when it comes to revenue.
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