IT
TCS’ costly data centre venture raises questions over returns, fit
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Tata Consultancy Services‘ (TCS) latest strategy to marry its legacy IT services business with a capex-heavy data centre venture could prove returns-dilutive with limited operational synergies, analysts said. However, as AI disrupts its core business, diversifying into new segments could support the company’s long-term growth.
Unlike the asset-light, cash-generative IT services model that typically delivers industry-leading ROCEs (return on capital employed), the new business may yield sub-10% returns, India Ratings & Research estimates. The…
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