Connect with us

Company News

TCS beats street estimates with 16.2% Q1 revenue growth

Tata Consultancy Services reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending June 30, 2022.

Highlights of the Quarter Ended June 30, 2022

  • Revenue at `52,758 crore, +16.2% YoY
  • Constant Currency revenue growth: +15.5% YoY
  • Operating Margin at 23.1%; contraction of 2.4% YoY
  • Net Income at `9,478 crore, +5.2% YoY | Net Margin at 18%
  • Net Cash from Operations at `10,810 crore ie 114.1% of Net Income
  • Net headcount addition of 14,136 |Workforce strength: 606,331
  • Diverse and inclusive workplace: Women in the workforce: 35.5% | 153 Nationalities
  • Building a G&T workforce: 12 million learning hours clocked | 1.7 million competencies acquired
  • LTM IT Services attrition rate at 19.7%
  • Dividend per share: ` 8.00 | Record date 16/07/2022 | Payment date 03/08/2022

Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “We are starting the new fiscal year on a strong note, with all-round growth and strong deal wins across all our segments. Pipeline velocity and deal closures continue to be strong, but we remain vigilant given the macro-level uncertainties. Our new organization structure has settled in nicely, getting us closer to our clients and making us nimbler in a dynamic environment. Looking ahead, we remain confident in the resilience of technology spending and the secular tailwinds driving our growth.”

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said: “We are pleased with our execution during the quarter wherein we successfully delivered several transformation programs. The investments we made on people, upskilling efforts and select lateral hiring et al helped manage the talent turnover with minimum impact on our operations. During the quarter, we have resumed in-person meetings, and hosted several clients at our facilities. We are bringing in more of our associates back to our development centres, and it is steadily increasing at all levels. On the sustainability front, we have signed our commitment to SBTi version 5 standards during the quarter and are making steady progress towards our net zero journey with tremendous alignment to this initiative across our associates.”

Samir Seksaria, Chief Financial Officer, said: “It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1% reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalizing travel expenses. However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory.”

Milind Lakkad, Chief HR Officer, said: “Our investment in strategic talent development initiatives and the linking of learning to career development have energized our workforce. Following our annual compensation review, employees received salary increases of 5 to 8%, with top performers getting even bigger hikes. Our empowering, performance-driven work culture is helping us attract local talent across all our key markets. Continued hiring momentum resulted in a milestone quarter, with the employee strength crossing the 600,000 mark.”

Q1 Segment highlights
Industries: Growth was led by Retail and CPG (25.1%), Communications & Media (+19.6%), Manufacturing vertical (+16.4%) and Technology & Services (+16.4%). BFSI grew +13.9% while Life Sciences and Healthcare grew +11.9%

Markets: Among major markets, North America led with +19.1% growth; Continental Europe grew +12.1% and UK grew +12.6%. In emerging markets, India grew +20.8%, Asia Pacific grew +6.2%, Latin America grew +21.6%, and Middle East & Africa grew 3.2%.

Services: There was strong, broad-based demand across the different services, led by Cloud, Consulting & Service Integration, Cognitive Business Operations and Enterprise Application Services. Key themes driving G&T demand in Q1 were customer experience, cloud transformation and sustainability.

  • Consulting & Services Integration: Saw strong growth led by finance and shared services, supply chain, next-gen enterprise transformation and cloud strategy and transformation.
  • Cloud Platform Services: Continues to experience strong growth as clients actively invest in hybrid cloud strategies and pursue multi-horizon cloud transformation initiatives. Infrastructure, application and data modernization, operating model transformations and business transformations drove growth. Hyperscaler partnerships continue to strengthen and expand from ongoing joint GTM initiatives.
  • Digital Transformation Services: Growth in Q1 was led by cloud ERP modernization using SAP S/4 HANA, Salesforce and digital process management services. TCS’ industry solutions powered by TCS Crystallus™ continued to resonate strongly with clients. TCS Interactive saw strong demand for design-led digital experience services across B2B, B2C and D2C initiatives and digital marketing. In cybersecurity, demand was driven by managed services in security support, upgrades and monitoring & operations, and areas like IAM modernization, Fraud Prevention & Digital Forensics. Cyber Defense Suite continues to gain adoption.
  • Cognitive Business Operations: Saw strong demand in areas like datacenter and network services, customer experience management, HR operations, supply chain, digital workplace and verticalized operations. Trends around vendor consolidation and integrated operations deals continue to strengthen. TCS’ contextual knowledge and assets like Cognix™, MFDM™ and ignio™ are helping it gain share in this segment.

Key highlights

  • Selected by a leading US based freight railroad operator, as a strategic partner to transform their complete IT landscape & support their operations, locomotives, and assets to enhance employee experience and productivity. TCS will leverage Ignio™, Cognix™ and MFDM™ as part of its “Right-fit Automation” for Digital Operations.
  • Selected by a global leader in HR services, to provide a consolidated cloud-based Infrastructure as a Service for consumption across its Global and local operating companies. As part of this engagement, TCS will be responsible for centralizing all Cloud consumption, standardize the operating processes and bring efficiency in usage. TCS has been able to provide significant cost benefits with the new contract structure and bring additional commitments from modernization and skills perspective.
  • Selected by Outokumpu, a Finland based global leader in sustainable stainless steel, to transform its IT landscape with an agile and secure cloud-based digital core to reduce its carbon footprint and support its strategic aspirations.
  • Selected by HellermannTyton, subsidiary of Aptiv PLC, a technology company focused on shaping the future of mobility, as their strategic partner to Transform their IT Infrastructure Operations and management, by bringing in business aligned, scalable, secure, digitally automated operations through Technology Transformation and Consolidation.
  • Selected by a leading American pharmaceuticals distributor as the strategic transformation partner with a focus on patient care & experience, supply chain resilience, and agility in new product introduction. TCS will establish a strong IT foundation and transform the IT operating model across the full stack of application, data, infrastructure & security, and will also streamline operational processes. TCS will leverage its assets and investments including Ignio™, Cognix™ powered by MFDM™, TCS’ Cloud, TNaaS™, and Cognitive Bots to address client priorities and improve speed to market.
  • Selected by a Japanese multinational pharmaceutical company for their HR transformation initiative. Leveraging TCS Crystallus™ for Experience Transformation, TCS will enable enhanced employee engagement, retention, and recognition within the organization.
    Selected by Scottish Power Energy Retail Limited, part of the Iberdrola group, to help bring Customer Experience Transformation. TCS will adopt a ‘Digital First’ approach leveraging Cognix™, MFDM™ and deep contextual knowledge to help provide an omni-channel personalized customer experience.
  • Selected by a North America Energy Infrastructure client as a strategic partner for the digital transformation of Finance, Supply Chain and Asset Work Management functions. TCS will drive adoption of the industry best practices to align ERP processes, data and systems across the enterprise to deliver next-gen user experience leveraging a leading ERP Cloud platform along with asset management platform.
  • Selected by a Large Global Oil & Gas Industry client as the Global Digital Engineering partner. TCS will bring its IoT and Digital Engineering solutions to modernize their Drilling, Well Construction and Production Systems and provide innovation in Digital Transformation Initiatives. This will enable our Client to offer innovative connected solution to their End customers-delivering improved productivity and safety.
  • A leading global payment provider has selected TCS for building a new extensible and scalable Benefits platform for Central Europe, Middle East and Africa. The new platform will enable improved benefits management, transform experience for card holders and Issuers, enable easy onboarding of new partners, and scale to accommodate growth in the region. Additionally, it will have an API portal to leverage services from partners for building an ecosystem.
  • TCS has been selected as a strategic partner by Student Loans Company’s (SLC) Technology Group, to enable the lender’s transformation through delivery of strategic technology capabilities. A key focus will be on enabling the journey to the cloud through the delivery and support of SLC’s new Software-as-aService (SaaS) technologies and expanding its enterprise integration platform.

CT Bureau

Click to comment

You must be logged in to post a comment Login

Leave a Reply

 

Copyright © 2022 Communications Today

error: Content is protected !!