TCS: Travel, Retail Clients Most at Risk from U.S. Tariff Uncertainty
Tata Consultancy Services (TCS), India's biggest software exporter, has said that its customers in the retail, travel, and auto industries are most exposed to the current U.S. tariff uncertainty. The CEO of the company, K. Krithivasan, pointed out that these sectors might turn to cost-cutting if the uncertainty regarding U.S. tariffs persists, as companies are becoming more reluctant to make big spending commitments in the midst of global trade tension.
Though the banking and financial services sector is TCS's largest revenue driver, with almost one-third of its revenue, and though the retail and manufacturing industries are its second- and fourth-largest revenue sources, the banking industry is still the overarching contributor and appears to be least impacted by the tariff scenario, indicating no immediate danger to this key revenue pillar.
TCS derives around half of its business from North America and is, therefore, heavily exposed to the spillover effects of the U.S. tariff scenario. Krithivasan added that volatility in the consumer, hospitality, travel, and auto sectors is also likely to persist, and companies operating in these areas would have to concentrate on cost optimization if the scenario holds.
While suffering a recent dip in fourth-quarter profits and slowness among clients to decide on discretionary work, TCS is upbeat. The company forecasts the tariff standoff will be fleeting and fiscal year 2026 will outpace 2025 in performance. Krithivasan also underscored that clients consolidating IT vendors to optimize costs have operated in TCS's favor and enabled the firm to gain increased market share.
TCS's capability to adjust to persistent global uncertainties and benefit from vendor consolidation is likely to help its growth curve in the years ahead.
