“Given its initial stage, GenAI is not increasing the overall risk materiality from that perspective. We have adequate cover both from an errors and omissions (insurance) perspective and a D&O (directors and officers insurance policy), as well as from asset coverage too.Structurally, these are risks that are taken care of by the project management team, and our legal team is involved in looking at what the exposures could be, and we continue to mitigate them. Insurance is just a fallback to it,” he mentioned. Errors & omission insurance coverage protects companies and their staff from negligent actions from shoppers.
As corporations embrace GenAI for proof-of-concept to create new income upsides, they’re evaluating new claims that would emerge from D&O insurers, SEC proceedings, and AI disclosure-based claims. Seksaria additionally highlighted the corporate’s substantial insurance coverage protection, amounting to a whole bunch of hundreds of thousands of {dollars}, which covers a variety of risks. Seksaria emphasised that these risks are managed by the undertaking administration group, with the authorized group assessing potential exposures and repeatedly working to mitigate them. TCS is at present executing about 270 GenAI projects, and its AI and GenAI pipeline has doubled to $1.5 billion within the June quarter.
“The pipeline first needs to convert into an order book, then into revenues. So, once we get a more stable outlook coming from it, that is when we’ll start considering publishing those metrics. There could be new risks emerging from GenAI, and how we deal with it. IP protection becomes a big issue, and it is one of the risks that everyone will have to look into,” he added.
TCS’s working margin dropped 130 foundation factors sequentially to 24.7% on account of a wage hike, however on a year-on-year foundation, it expanded by 1.5%. “The overall impact of increments is 170 basis points, which has been in line with what we have called out in the past, which is anywhere between 150 to 200 basis points. We have been driving better productivity, improved utilisation, and reducing subcontractor costs. The first two factors reflect positively on the manpower cost, and that balances out some of the impact of increments in this quarter as well,” mentioned Seksaria. Its working margin is inching in the direction of its aspirational 26% to twenty-eight% band. Seksaria mentioned forex, within the final 12 months, has remained steady and range-bound. Currency depreciation does assist, however we’ve not seen that play out materially. The levers which we glance in the direction of within the quick time period might be extra by way of driving productiveness and improved utilisation.
