TCS Shares Climb 5.2% on AI Revenue Surge as IT Stocks Gain

Tata Consultancy Services shares rose after reporting a nearly 20% sequential increase in annualized AI revenue to $3.1 billion, helping offset sluggish growth in its traditional IT business and lifting broader Indian IT stocks.

Tata Consultancy Services shares climbed as much as 5.6% to 2,193.00 rupees, and were last up 5.2% at 2,183.00 rupees by 10:18 IST, while the Nifty IT index traded 2.5% higher.

Deal Flow and Revenue Metrics

The revenue expansion was underpinned by sustained corporate demand for automation and digital transformation services. During the July-September quarter, TCS reported a nearly 20% quarter-on-quarter increase in annualised AI revenue to $3.1 billion, according to an Investing.com report.

While the artificial intelligence segment expanded rapidly, traditional legacy services experienced more muted demand. The company's overall revenue, excluding currency fluctuations, rose 0.5% sequentially during the period.

Total Contract Values and Sector Impact

Total contract value of deals signed during the quarter stood at $9.6 billion, down slightly from $10 billion a year earlier. This contraction in headline deal values highlights how enterprises are reallocating tech budgets toward generative AI initiatives rather than expanding legacy infrastructure contracts.

The positive market reaction extended across the broader domestic technology sector. Wipro, Infosys, and HCL Technologies shares rose between 1.5% and 3% in sympathy with TCS's AI figures, providing a boost to the Nifty IT index.

What Drives Enterprise AI Adoption

The growth trajectory highlights how major IT services firms are commercializing internal frameworks and client-specific generative AI models. As clients demand faster deployment of machine learning capabilities, providers with established enterprise pipelines are capturing specialized IT spending despite flat overall macroeconomic indicators.