TCS sees dip in $100M clients—but order book hits $9.4B
What's the story
Tata Consultancy Services (TCS) has witnessed a drop in its number of clients contributing over $100 million to its revenue. The count fell to 62 in Q1 FY26, the lowest in five quarters. This reflects the company's reduced IT spending on large transformation projects and a shift toward smaller-sized Generative AI deals. However, despite this decline and the challenges posed by global uncertainties, TCS's order book has grown to $9.4 billion, reflecting a strong demand for its services.
Client dynamics
Decline in number of large clients
The number of customers contributing over $100 million to TCS's revenue fell by two on a quarter-on-quarter basis, from 64 in Q4 FY25 to 62 in Q1 FY26. However, the company has seen significant growth in its $1 million and other smaller account categories, with the number of clients contributing over $1 million each hitting an all-time high of 1,336.
Information
TCS's revenue for the quarter
TCS's revenue for the quarter stood at ₹63,437 crore, a year-on-year (YoY) decline of 3.1% in constant currency terms. However, the company's operating margins remained strong at 24.5%. This financial performance comes amid a changing client base and global market uncertainties.
Strategic shift
Focus on shorter projects, industry-specific AI solutions
TCS is adapting to the changing demands of its clients by focusing on shorter projects and industry-specific AI solutions. Aarthi Subramanian, COO of TCS, said companies are now looking for "industry-specific AI solutions." She added they want to know how to set up an AI office or center of excellence and how to scale AI platforms across functions.