TCS resolute on 26-28% long-term margin aim despite heavy AI-led investments
This story was originally published at 20:13 IST on 17 December 2025
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NEW DELHI – Information technology services bellwether Tata Consultancy Services Ltd. has once again stated its commitment to its long-term operating margin target of 26-28% during the company's Analyst Day 2025 meet Wednesday. This is despite the company's aspiration to become "the world's largest artificial intelligence-led technology services company", which will demand substantial investment.
"We believe that the investments which we have been making early has been the source of how we are able to maintain a sustained industry-leading margin band and we are taking the challenge by taking into account all the investments...," a top company executive said. "Growth with profitability will remain our mantra and we'll not be shy of investments but we will be driving towards the 26% to 28% (band)."
In the September quarter, TCS had registered an operating margin of 25.2%. The company currently spends about $1 billion annually on learning and development, targeted research and innovation, and on specialised infrastructure tied to the new-age services centred around AI, generative AI, cloud transformation, and so on, according to the management.
In a presentation to the analysts, the management elaborated on the five pillars TCS is focusing on as part of its AI push–-internal transformation, redefinition of services, building a future-ready talent model, making AI a reality for clients, and targeting a play across levels in the AI ecosystem. Besides building an AI-first culture within the company and training its workforce in AI fluency, TCS said it is redefining services for the "human + AI" model.
"Every role in the company has to become AI first, AI-centric," said Aarthi Subramanian, executive director, president, and chief operating officer. "So we have a programme for AI which we have launched to all our sales, solution, advisory, and delivery teams and this has been done at scale... The important thing here is that AI is also introducing new roles." End
Reported by Shakshi Jain
Edited by Rajeev Pai
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