'GenAI impact to be unimaginable': TCS Chairman N Chandrasekaran highlights in 2024 annual report

N Chandrasekaran, the chairman of Tata Consultancy Services (TCS), underscored the profound impact that generative artificial intelligence (GenAI) technologies are expected to have across various sectors and nations in the future. In the TCS annual report for 2024, Chandrasekaran emphasized that GenAI will significantly enhance productivity and create unprecedented impacts.

Key Insights from Chandrasekaran’s Observations

Chandrasekaran pointed out that the extensive investments enterprises have made in cloud, data infrastructure, and large-scale processing power will facilitate the advancement and integration of AI/GenAI. He remarked, "GenAI will not only improve productivity but also create impact we hitherto have not seen or imagined."

Major Trends and Technological Shifts

These trends will require substantial technological investments across various sectors. TCS is proactively investing in and developing capabilities to align with these rapid technological shifts.

TCS's Strategic Moves and Financial Performance

During the fiscal year 2024 (April 2023 to March 2024), TCS bolstered its AI and Cloud expertise by establishing the AI.Cloud unit. CEO K Krithivasan noted that while GenAI adoption is still in its nascent stages, it is poised to revolutionize every industry.

Despite facing a slowdown in the previous fiscal year, TCS reported a 6.8% increase in revenue, reaching ₹2.41 lakh crore, with margins at 24.6%. The company also achieved an all-time high order book of $42.7 billion in total contract value (TCV). Krithivasan expressed optimism about the company’s medium to long-term growth outlook based on these figures.

However, TCS expects the uncertainty that characterized the previous year to persist in the coming quarters. The annual report projects subdued capital expenditures (Capex) as enterprises aim to maximize returns from existing investments, leading to muted spending on infrastructure, software, and services.

Workforce Development and Corporate Strategy

TCS is committed to upskilling its workforce in emerging technologies. In the fiscal year, employees completed over 51 million learning hours and acquired nearly 5 million new competencies. As of March 2024, TCS's total employee headcount decreased by approximately 13,250, bringing the total to 601,546.

Following a mandate to return to the office five days a week, about 55% of TCS employees are now working from the office on all working days.

Achievements and Market Position

Over the past two decades, TCS has achieved a compounded annual growth rate of over 18% in both revenue and net profits. Chandrasekaran also highlighted that TCS maintained its position as the second most valuable global IT services brand, with a valuation of $19.2 billion.