BENGALURU: Tata Consultancy Services Ltd (TCS) has seen the worst of its recent slowdown and expects artificial intelligence to drive its next phase of growth, chairman N Chandrasekaran said Tuesday, outlining a future in which the country's largest technology-services company could eventually deploy as many AI agents as employees.
The comments, made at TCS's 31st annual general meeting (AGM), came as shareholders pressed management on the company's share-price performance and the impact of AI on jobs, growth and the broader technology-services industry.
Growth path
Addressing concerns over the company's recent performance, Chandrasekaran argued that technology disruptions have historically weighed on growth, investor confidence and valuations before giving way to a new phase of expansion.
“Those shareholders who have remained with the company for the last 25, 30 years, or at least 20 years since we went public, you will know that we have faced technology disruptions, and every time there is a technology disruption, there is a transition time. Because the clients pause the adoption of technology. And you will see a slowness in growth, market loses confidence, and the share price goes down,” Chandrasekaran said in response to shareholder questions on the stock's decline.
At least a seventh of the 42 shareholders present at the AGM quizzed management on the fall in share prices, while four-fifths raised questions about AI and its impact on the company.
TCS shares fell 0.1% on Tuesday to ₹2,149.55, a six-year low. The stock has declined 33% since the start of the year, making it the worst performer among the country's five largest information-technology services companies. Shares of Infosys Ltd, HCL Technologies Ltd, Wipro Ltd and Tech Mahindra Ltd have fallen between 7% and 31% over the same period.
“Share prices can go down for two reasons. Either because the company's revenue on profits fall, or the market's belief on the future growth is doubtful. So the P/E (price to earnings) multiples fall,” Chandrasekaran said, adding that “we have seen the worst of the last couple of years and I believe AI growth will be significant.”
The Mumbai-based company reported $30.02 billion in revenue last year, down 0.5% from a year earlier. Much of the decline came from its India business, which accounts for 8% of revenue. It was the company's first annual revenue decline since listing in 2004.
Chandrasekaran said TCS remains focused on returning to double-digit revenue growth, though he declined to commit to a timeline. The company expects AI revenue to help drive annual growth.
TCS ended the January-March 2026 quarter with over $2.3 billion in annualized revenue.
AI shift
A key part of that growth strategy is TCS's effort to embed AI across its business. Management said all of the company's revenue will have an AI component within the next two years.
The company also outlined how the technology could reshape its workforce as automation tools take over parts of the work traditionally performed by technology-services firms.
“The company will have an equal number of AI workers, we call them AI agents, as there are employees. (If) the company has half-a-million employees, the day is not far when the company will have half-a-million AI agents,” Chandrasekaran said.
TCS ended last fiscal year (FY26) with 584,519 employees, down by 23,460 from the preceding year. Much of this was on account of the largest layoff drive the company undertook last year.
Going forward, hiring will remain muted, the company said.
“Will it (AI) definitely lead to decrease in hiring? Absolutely. The company will not be hiring the kind of numbers that it used to hire,” Chandrasekaran said, “because certain portions of the work, in the current scheme of things, will go to agents.”
However, he added that AI would create new opportunities and talent requirements, even as the overall number of hires declines.
“That will be the nature of the transition that we have to go through not only as a company, as an industry, and as a country,” he said. For now, the company has not planned any further layoffs.
New challenges
The increasing use of AI agents also brings risks, Chandrasekaran said, noting that they can drift off course and deteriorate over time.
Getting them set up within an enterprise, training them on specific context, monitoring performance, governing compliance and managing cost at scale “will be a big challenge and a big opportunity for established IT services firms.”
Despite those challenges, Chandrasekaran described AI as the company's most significant opportunity.
A peer had voiced a similar view.
“More than 3 years after the launch of Generative AI, we can unequivocally say that Infosys is more relevant than ever, and we have a bright future in front of us. The shift from predictable machines to probabilistic ones is as consequential as the speed of adoption, and it is reshaping what the work now requires,” said Nandan Nilekani, chairman of Infosys Ltd, in his 22 May address to shareholders as part of the company's annual report.
While shareholders pressed management on AI and the company's recent performance, none raised questions about Chandrasekaran's possible third term as Tata Sons chairman. One shareholder congratulated him on completing 10 years in the role.
