Chairman N. Chandrasekaran told ET Now that Tata Consultancy Services is actively working with businesses to implement next-generation “Agentic AI” solutions, highlighting artificial intelligence as the biggest opportunity in the company’s history.
Speaking at the company’s 31st Annual General Meeting, he emphasized that while the company continues to produce consistent financial performance in a difficult global context, AI is emerging as a key growth engine.
According to Chandrasekaran, TCS is “working with enterprises on the deployment of Agentic AI solutions,” indicating a change in which AI systems are becoming more adept at carrying out intricate, end-to-end workflows. As businesses move to incorporate intelligence into their core operations, he stated that the organization is “actively engaging with customers to build AI platforms.”
“Far from being a mortal threat, AI is the most significant opportunity yet for enterprise IT,” Chandrasekaran said, framing AI as a revolutionary force. He went on to say that AI is “infrastructure, an infrastructure of intelligence” rather than merely a tool, which is broadening rather than narrowing the spectrum of technology adoption across industries.
The chairman of TCS emphasized the company’s resiliency in the face of global challenges, such as the West Asia crisis. “Despite the West Asia crisis, the business remained resilient,” he stated. With “margins remaining stable, supported by strong revenue growth and a robust deal pipeline,” the company’s net income increased by 8.8% in FY26. Additionally, he said that even in times of market turbulence, “the business fundamentals have held.”
Demand circumstances are still favorable, according to Chandrasekaran. “The margins have held. Income has increased. He reaffirmed trust in the fundamental strength of the company by saying, “The deal pipeline is stronger than ever.” He noted that organizations are placing a greater emphasis on efficiency and resilience, and he explicitly linked this momentum to growing business spending on AI.
He emphasized that long-term client connections continue to be crucial to strategy. “Trust and contextual knowledge would be critical differentiators in the AI era,” he stated, adding that “long-standing customer relationships remain at the core of TCS’s strategy.” The model won’t be the most limited resource in enterprise AI. “Context and trust will be key,” he noted.
Chandrasekaran reaffirmed the company’s goal to spearhead the upcoming stage of technological change. He stated, “The company wants to become the world’s leading AI-enabled technology company.” Additionally, he highlighted TCS’s strong internal momentum, pointing out that the company is already developing capabilities across a variety of AI-led prospects, including governance systems and enterprise platforms.
“What we build in this next chapter… will be the most consequential work this company has ever done,” he added, referring to AI as the sector’s next growth engine. This marked a clear shift for TCS and the larger IT industry toward AI-led innovation.
The Chairman’s Address at the TCS AGM 2026 is available in full here.
Greetings to everyone attending Tata Consultancy Services’ 31st Annual General Meeting.
Let me start by going over the state of the market and the last year’s performance of your company.
As everyone is aware, the year started off well with the signing of the historic trade agreement between India and the EU as well as the temporary accord between India and the US. But by early March, worries about stagflation—falling output combined with rising inflation—were growing due to the onset of the West Asia crisis.
Businesses have prioritized resilience, productivity, and trust-based decision-making in this context. Your company has performed credibly in spite of this changing global environment characterized by geopolitical tensions and economic uncertainties.
In fiscal 2026, your company:
Generated a 4.6% increase in income over the previous year, totaling Rupees Two Lakh Sixty-Seven Thousand Twenty-one crore (Rs 2,67,021 cr), or almost US$30 billion. Rupees sixty-six thousand eight hundred thirty-eight crore (Rs 66,838 crore) was the operating income, and the operating margin was twenty-five percent.
With a net margin of 19.8%, net income was Rupees Fifty-Two Thousand Eight Hundred Twenty crore (Rs 52,820 cr), an increase of 8.8% over the prior year. Net margin and operational margin were both at their best points in four years. 105.9% of the net profit came from operating cash flows.
The Directors have recommended a final dividend of Rs 31 per share, bringing the total payout for fiscal 2026 to Rs 110 per share, in accordance with our tradition of returning significant free cash flow to shareholders and based on the Company’s performance. We exceeded USD 40.7 billion in total contract value.
In terms of corporate social responsibility, your firm spent more than Rs 1,000 cr on programs in the areas of education, skills, healthcare, and the environment that impacted 18.13 million lives over the course of the year. Additionally, your workers volunteered 9.42 million hours, which had an impact on 12.96 million lives.
Allow me to describe the format of today’s meeting. In his presentation, Mr. Krithivasan will walk you through TCS’s financial results, our AI strategy, and the particular steps our company is doing.
My purpose today is different.
I would want to share with you my thoughts on artificial intelligence, which I consider to be the biggest potential this organization has ever encountered.
[Section 1: The Inquiries of the Markets]
By adopting powerful new technologies and making them function, dependably, and responsibly, inside the world’s most demanding institutions—something many said was impossible—India’s technology sector established its place as a leader in the world. A fundamental challenge to that model, according to others, is AI. In my opinion, AI represents the biggest opportunity for enterprise IT to date, not a deadly threat.
Agentic AI systems started to appear truly prepared for enterprise processes in late 2024, including code development, software testing, and technology operations. An important question emerged: what will happen to a sector of the economy that relies on AI to perform its task?
The Nifty IT index in India dropped by about one-third. Shares of all platform and technology services businesses fell precipitously worldwide. However, margins have remained stable. Income has increased. The pipeline for deals is more robust than before.
The principles of business have not changed.
What is happening, then? I think a misunderstanding about the connection between AI and IT services is the root of the discrepancy. Today, I want to discuss what I think that partnership truly looks like.
[Section 2: AI as the Infrastructure of Intelligence]
AI tools lessen the requirement for human input during program development and upkeep. But AI does more than just make work easier. It is more than just a technology. It is infrastructure, an intelligence-based infrastructure. We did not utilize less coal when steam engines increased its efficiency. Because it opened up new possibilities and uses, we used more.
Every industry now relies heavily on technology thanks to the cloud. AI will follow suit, but on a larger scale and with a broader scope. Many more decisions, interactions, and processes across numerous industries will be candidates for AI-driven transformation as the cost of intelligence declines.
Over the next two years, three-quarters of businesses worldwide anticipate an increase in technology spending, primarily due to artificial intelligence. Organizations that were previously unserved by IT services are now in need of our skills, which is expanding our market. Within the next ten years, the worldwide enterprise IT market, which is presently valued at about $1.6 trillion, is expected to double to $3 trillion.
AI is increasing expectations for what technology can accomplish in every industry. For decades, I have observed this industry negotiate every significant technological advancement. I’ve never seen one with that much to construct. I’ll show you where that opportunity is.
[Section 3: Five Possibilities]
I want to tell you about the at least five major opportunities that I think exist, as well as what TCS is presently doing in each of them. Updating the main technology features that big enterprises depend on comes first.
Many companies continue to operate with antiquated systems, outdated infrastructure, fragmented data, and inadequate cybersecurity. Enterprise AI begins with overhauling these operations, which will result in significant efficiency savings and enable companies to reinvest in better systems. Spending on technology increases rather than decreases as a result.
TCS is observing this in all of its clients. TCS created a standardized IT backbone for a multinational pharmaceutical company by combining eight disparate SAP systems that operated across divisions and nations with dispersed data into a single, unified S/4HANA Cloud platform that connected more than 160 satellite systems.
Using AI to rethink how companies run is the second. AI necessitates a complete overhaul of the entire process, from customer experiences to supplier chains. Deep domain and client expertise are needed for this.
TCS is aware of that.
TCS has developed an AI platform that controls every step of the client process for a multinational bank. Managing and supervising AI in organizations comes in third. AI agents are not stationary. They act, learn, veer off course, and may even degenerate. For well-established IT services companies, setting them up within an organization, training them in a particular context, keeping an eye on performance, regulating compliance, and controlling costs at scale will be both a significant difficulty and a significant opportunity.
Governing intelligence will be the distinguishing characteristic of the future age, if maintaining applications was the defining characteristic of the previous one.
This is already a real opportunity.
For a top international insurer, TCS has developed a single governance platform that manages over hundreds of AI agents throughout the company and makes sure they adhere to cost, security, and compliance guidelines. Sovereign AI is the fourth.
There will be a greater need for sovereign cloud and data infrastructure as the usage of AI by governments and regulated organizations grows, as will the requirement to own and control AI technologies. They will require assistance in ensuring the best possible compliance and oversight procedures as well as integrating AI with current IT systems. This is a complex, long-term project that calls for institutional credibility and experience.
This is being built by TCS. TCS has introduced sovereign AI infrastructure for Europe and India, offering AI capabilities that adhere to stringent security, compliance, and data sovereignty regulations. TCS brings technical scale and domain expertise to create end-to-end sovereign AI solutions by coordinating with telecom providers, foundational model firms, hyperscalers, and hardware companies.
Physical AI comes last.
AI is currently mostly found in software and computers, but it will soon find its way into the real world, including supply chains, businesses, factories, warehouses, energy networks, and automobiles. Experts that know how to connect IT, AI, and physical infrastructure and equipment will be needed for this.
Using a four-legged robot equipped with cameras and sensors, TCS implemented an agentic + physical AI solution for a multinational agribusiness to patrol dangerous warehouse settings that previously required human personnel. TCS is already developing, delivering, and demonstrating in all five domains.
Let me now explain why TCS is in a unique position to lead this business.
[Section 4: The IT Services Sector’s Structural Leadership Potential]
Giving organizations access to AI technology will not allow them to take advantage of these potential. Businesses must arrange their data and incorporate it into cumbersome IT systems that have developed over many years. TCS has worked with clients for years, managing change, maintaining software, and discovering the exceptions that are never shown in architectural diagrams.
Of course, it is possible to close the talent gap in AI between new competitors and existing businesses. However, established businesses continue to have the advantage when it comes to the two most important factors: context and trust. This is a result of years of executing projects internationally, solid client connections, and extensive regulatory expertise. In the age of enterprise AI, all will be crucial.
The model won’t be the most limited resource in enterprise AI. It will be trust and context.
The change is already well under way at TCS. TCS’s annualized AI revenues in the last quarter of fiscal 2026 were US$2.4 billion, expanding at a CQGR of 22.4%. In my opinion, TCS will employ as many AI agents as human workers within the next three years.
The most significant work this organization has ever done will be what we create in the upcoming chapter for our clients, India, and you.
We still have the best of TCS ahead of us.
