AI-driven growth of TCS makes its M&A strategy more aggressive

TCS's $700-million buyout of Salesforce firm Coastal Cloud highlights a stronger AI-focused M&A strategy, but analysts view the valuation as steep and note the market's muted response

Even as Tata Consultancy Services (TCS) on Wednesday announced one of its largest ever acquisitions, the market reaction remained subdued. While analysts considered the deal expensive, many agreed that AI-driven growth is pushing TCS to become more aggressive in its mergers and acquisitions (M&A) strategy. 

 

India’s largest IT services provider announced the acquisition of US-based Coastal Cloud in an all-cash transaction of $700 million. The last such acquisition TCS did was in 2008, when it acquired Citigroup’s captive BPO arm Citigroup Global Services for $505 million. 

 

On Thursday, TCS stock opened at ₹3,206 per share, up marginally by 0.56 per