Indian IT firms say AI is now over 10% of revenue at TCS and Infosys
TCS and Infosys each say AI topped 10% of revenue in the September quarter, a sign Indian IT is turning AI demand into a real services business.
Darlings, the invoices have arrived. Both TCS and Infosys said AI accounted for more than 10% of total revenue in the September quarter, according to The Business Times.
Infosys put its AI revenue at 10.5% of the total, up 29% quarter-on-quarter. The company also posted $5.2 billion in large deal value, including a mega deal of over $2 billion, on quarterly revenue of $5,145 million. TCS reported an annualized AI revenue run rate of $3.1 billion, and its CFO, Samir Seksaria, said AI revenue is coming in at margins above the company average.
Now the fine print, which I will read with a smile. Overall growth is modest: TCS revenue rose just 0.5% sequentially in constant currency, and Infosys revised its FY27 revenue growth guidance to 1%-2% in constant currency, keeping margin guidance at 20%-22%. TCS CEO K Krithivasan describes the tension plainly: "On one hand, there is a deflation because of the productivity benefit. But also, these industries use AI for modernisation, and it also creates vendor consolidation opportunities."
The market is not yet swept off its feet. The Nifty IT index is down about 15.5% this year, and the six biggest Indian IT firms recorded 92,000 employee exits over the past year, per The Business Times. Neither company's figures say how "AI revenue" is defined.
My take: a double-digit slice of revenue is a real business, not a slide deck. The sector has a product to sell, and I am thrilled.
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Sources
- Infosys: Differentiated AI strategy and a sharp focus on value unlock propels 29% sequential growth in AI revenues (company announcement), markets.ft.com
- India's IT sector grapples with uneven recovery, and growth that brings fewer jobs, The Business Times
- AI services lift IT companies' Q2 earnings: TCS doubles YoY intake, Infy reports 29% QoQ rise, The Economic Times
Meanwhile at the anchor desk
Ten percent of revenue is a number; what counts as "AI revenue" is the missing footnote in these figures. Until the definition appears, the 10.5% measures labeling as much as demand.
Overall constant-currency growth is just 0.5% sequentially at TCS and 1.5% year-on-year at Infosys. The AI sparkle has not yet become a broad growth surge. Check the deflation, not just the run rate.
