TCS: AI Network Growth
TCS Shares Surge After Securing Major AI-Driven Network Transformation Deal with ABB
Anonymous
Key Points
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Anupam Singhal, President of Manufacturing at TCS, framed the ABB deal as bringing AI into the network operations with an 'infrastructure to intelligence' approach, enabling networks to sense, adapt, and improve continuously to build a resilient, intelligent backbone.
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ABB’s Future Network Model programme will be transformed into a standardized, centrally managed digital infrastructure, with TCS as a strategic partner to design, integrate and run ABB’s global network while orchestrating its multi-vendor environment.
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The ABB transformation includes shifting to a software-defined, cloud-native network environment to enable real-time analytics across ABB’s global manufacturing and service operations.
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TCS’s Q1 performance highlighted AI momentum, with revenue of ₹72,275 crore, net profit ₹13,349 crore, annualised AI revenue of $2.6 billion, and AI-driven deal wins totaling about $9.5 billion in the quarter.
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The market reaction was robust, with TCS shares rising roughly 4.5%–6% on the ABB news, including intraday gains around 5.88% to about ₹2,190.4, helping lead gains in the IT sector.
TCS shares jumped nearly 6% on Monday after the Indian IT giant announced a multi-year, multi-million-dollar deal with Swiss-Swedish engineering firm ABB to transform its global network operations using artificial intelligence Reuters. The deal, announced July 13, 2026, will see TCS design, run, and secure ABB's entire global network through a "Network-as-a-Service" model, replacing fragmented, multi-vendor infrastructure with a centrally managed digital backbone Connected to India.
The news sent TCS shares as high as ₹2,204.75 intraday before settling around ₹2,186.80, fueling a 4% rally in India's Nifty IT index Sahi. Rivals Infosys, HCLTech, and Tech Mahindra all rose between 3.5% and 5% on the same day Sahi.
TCS Turns ABB's Network from Hardware to AI-Driven Service
The ABB deal is part of ABB's "Future Network Model" programme BISInfotech. The goal is to ditch fragmented, hardware-heavy infrastructure and replace it with a software-defined, cloud-native network. TCS will use AI to enable real-time analytics, autonomous network sensing, and automated problem resolution across ABB's global manufacturing and service operations Whalesbook.
Anupam Singhal, TCS's President of Manufacturing, called it an "infrastructure to intelligence" approach. He said the goal is to build networks that "sense, adapt, and improve continuously." On the ABB side, Group CIO Alec Joannou said the programme is "an important milestone in reinforcing the digital foundation of ABB's global operations" Connected to India. The two companies have worked together for 20 years BISInfotech.
TCS Posts Strong Q1 Results With $2.6 Billion AI Revenue Run-Rate
The ABB announcement landed just days after TCS reported its Q1 FY27 results on July 9. Revenue hit ₹72,275 crore, up 13.9% year-over-year Whalesbook. Net profit came in at ₹13,349 crore, down slightly due to a one-time ₹668 crore legal settlement with Computer Sciences Corporation The Financial Express. Strip out that charge, and normalized profit rose 8.5% year-over-year.
TCS secured $9.5 billion in new contracts during the quarter, including an $800 million AI-led deal with industrial firm SKF The Times of India. Annualized AI revenue reached $2.6 billion, growing 13.6% sequentially. CEO K Krithivasan said customers are accelerating spending on "AI, modernisation, cybersecurity, and sovereign cloud," and that TCS is well-placed to "translate opportunity into sustained growth" The Financial Express.
Leadership Reshuffle Creates Five New Business Units
One day before the ABB announcement, on July 12, TCS CEO K Krithivasan and COO Aarthi Subramanian sent internal memos unveiling a sweeping leadership overhaul Reuters. The restructuring created five new business groups: Travel and Transport, Energy and Utilities, a ServiceNow Practice, a U.S. West Coast Business unit, and Global Autonomous Businesses Sahi.
The biggest structural change was splitting TCS's massive BFSI Americas unit — which generates over 30% of company revenue — into U.S. West and U.S. East divisions Sahi. Rakesh Kumar will lead the West unit, and Mohan Veeturi the East. Analysts said the move shows TCS is fighting to protect its dominant market share against AI-driven disruption Reuters.
AI Boom Raises Growth Hopes — and Job Cut Concerns
TCS Chairman N. Chandrasekaran told shareholders in June that AI agents could match TCS's human headcount of 5.8 lakh employees within three years BISInfotech. He called AI "the most significant opportunity yet for enterprise IT." Investor confidence is high. Market analysts say the ABB deal proves TCS can convert AI pilot programmes into large, production-grade contracts EquityPandit.
But the growth story has a shadow. TCS cut over 12,000 jobs in FY26, shrinking its workforce by more than 23,000 net over the year Whalesbook. Analysts also flagged that TCS's EBIT margin compressed by 130 basis points sequentially to 24%, pressured by wage hikes and AI contract pricing that runs 2%–3% lower than traditional deals. The question is whether AI revenue growth can outpace those mounting pressures.
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