FILE PHOTO: A man walks past a logo of Tata Consultancy Services (TCS) before a press conference announcing the company's quarterly results in Mumbai, India, January 11, 2024. REUTERS/Francis Mascarenhas/File Photo
BENGALURU, Jan 12 (Reuters) - India's Tata Consultancy Services posted a third-quarter revenue marginally above estimates on Monday on AI-driven demand, with revenue from its key North America market registering growth for the first time in two years.
Consolidated revenue for India's largest software services firm rose 4.9% to 670.87 billion rupees ($7.44 billion) in the quarter ended December 31.
Analysts had expected 666.76 billion rupees, as per data compiled by LSEG.
AI-led tech spending drove growth for the Tata-group firm in a seasonally weak quarter in which clients typically scale down operations during the year-end.
"AI services now generate $1.8 billion in annualized revenue," TCS said in its statement on Monday, accounting for about 5.8% of overall revenue.
Five out of eight geographies grew in the quarter, led by Middle East Asia's 8.3% and Continental Europe's 3.5% growth.
The North America market, which accounts for nearly half of the firm's overall revenue, grew for the first time since July-September 2023.
"The North America market has risen as the demand slowdown has bottomed out but we expect a gradual recovery as structural weakness continues," said Ambarish Shah, analyst, Systematix.
Clients of India's $283 billion IT industry have remained cautious about committing tech spending due to concerns about growth in the world's largest economy. Macro headwinds such as uncertainty over U.S. tariffs and challenges from proposed $100,000 visa fees also weighed.
The Mumbai-based firm's quarterly net profit fell 14% to 106.57 billion rupees, missing analyst estimates of 130.24 billion rupees. TCS attributed this to one-time restructuring costs associated with layoffs, the impact of India's new labour codes enacted in November 2025 and other legal costs.
TCS's total order book stood at $9.3 billion in the quarter, down from $10.2 billion a year ago. The firm had announced eight deals in the reporting quarter - the most among India's top-five IT firms - including deals with British food retailer Morrisons and Danish telecom operator Telenor.
The company declared a dividend of 11 rupees per share as well as a special dividend of 46 rupees per share. Its Mumbai-listed shares closed 1.3% higher ahead of the results.
($1 = 90.1660 Indian rupees)
(Reporting by Sai Ishwarbharath B; Editing by Janane Venkatraman)
