India’s TCS says retail, travel clients more exposed to US tariff turmoil

BENGALURU: Clients of India’s Tata Consultancy Services in the retail, travel and automobile sectors are more exposed to fallout from U.S. tariffs and they may resort to cost-cutting if uncertainty persists, the company’s CEO told Reuters.

The banking and financial services sector - which makes up nearly a third of revenue for India’s biggest software exporter - remains unaffected, TCS top boss K Krithivasan said in an interview.

The global trade war and US President Donald Trump’s back-and-forth on tariffs have made it difficult to forecast market conditions, making businesses hesitant about signing off on big spending decisions.

“The consumer business, hospitality business, travel, auto industry are the businesses that we have to watch out for. If the uncertainty continues for longer, those businesses may have to focus more on cost optimisation, but at this time, I have not heard anything,” Krithivasan said.

Retail and manufacturing are the company’s second- and fourth- largest revenue contributors, while banking remains the largest.

TCS earns roughly half of its revenue from North America, a crucial market for Indian IT service providers that are exposed to the tariff fallout through their U.S. clients.

The company missed fourth-quarter earnings estimates on Thursday and warned about clients delaying decision-making in discretionary projects. TCS, however, expects the uncertainty to be “shortlived”.

Krithivasan maintained he expects fiscal year 2026 to be better than 2025, as there were still legacy software and systems clients may have to replace in the medium- to long-term.

TCS also said a trend of clients consolidating their IT vendors has helped the company gain market share.

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“Particularly when customers look at cost optimization as a key focus area, they will try to reduce the number of service providers. TCS has been a beneficiary of these consolidations that have happened in FY25,” Krithivasan said.