Tata Consultancy Services reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending March 31, 2022.
Highlights of the FY 2021-22
- Client metrics: Added 10 clients in the $100 Mn+ bucket, 19 in the $50 Mn+ bucket, 40 in the $20 Mn+ bucket and 52 in the $10Mn+ bucket
- Employee Metrics:
- Net Addition: 103,546 employees
- Employee Headcount: 592,195
- Diversity: 153 nationalities; 35.6% women
- IT Services Attrition (LTM): 17.4%
- Talent Development:
- 3.5 million digital competencies acquired
- Number of Contextual Masters crosses
- 50,000 mark
- Free Cash Flow: $ 5.257 billion
- $ 4.179 billion of cash returned to shareholders through buybacks and dividends
Highlights of the Quarter Ended March 31, 2022
- Operating Margin: 25%; Net Margin: 19.6%
- Net Income: $1.314 billion, +3.7% YoY
- Strong Cash conversion: Operating Cash Flow 111.3% of Net Income
- Net Addition: 35,209 employees, highest ever in a quarter
- Final Dividend per share (proposed): `22
Top Employer Brand
- Recognized as 2022 Global Top Employer for the seventh year in a row by the Top Employers Institute
- Ranked #1 in India Top Company by LinkedIn, #11 in Australia and #19 in Netherlands, among the best workplaces for career growth
- Ranked #3 in the BT-Taggd survey of the Best Companies to Work For in India
*Excludes legal claim provision in FY21
Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “We are closing FY 22 on a strong note, with mid-teen growth and adding the maximum incremental revenue ever. Increasing participation in our customers’ growth and transformation journeys, and an all-time high order book provide a strong and sustainable foundation for continued growth ahead.”
N Ganapathy Subramaniam,Chief Operating Officer and Executive Director, said: “It is immensely satisfying to close the year with robust, broad-based growth, industry-leading margins and the highest ever order book. During the year, we took on technologically challenging, industry-first transformational programs and brought to bear the full power of TCS’ capabilities and that of our partner ecosystem, to successfully deliver market-changing outcomes. Our continued investments in building newer capabilities, our passion for innovation, our contextual knowledge and most importantly, our self-belief have been key to this, and these position us very well for continued success ahead.”
Samir Seksaria, Chief Financial Officer, said: “While continuing to make all the investments needed to support our growth aspirations, we managed the headwinds this year to deliver an industry-leading operating margin yet again. The successful completion of our fourth buyback in five years is another milestone in our shareholder-friendly approach to capital allocation.”
Milind Lakkad, Chief HR Officer, said: “With the highest ever net addition this year, consistently highest talent retention, benchmark talent development metrics, continued focus on health and wellbeing and numerous industry awards, we have reaffirmed TCS’ position as the #1 employer of choice.”
Q4 and full year segment highlights
Industries: All verticals grew in the mid to high teens. Growth was led by Retail and CPG (22.1%), Manufacturing vertical (+19%) and Communications & Media (+18.7%). Technology & Services grew (+18%) and Life Sciences and Healthcare grew (+16.4%) while BFSI grew (+12.9%).
On a full year basis, growth was led by Retail and CPG (20.6%), Manufacturing vertical (+19.4%), Life Sciences and Healthcare (+19.2%), BFSI grew (+16.7%), Technology & Services grew (+15.8%) and Communications & Media grew (+14.0%).
Markets: Growth among markets was led by North America which grew (+18.7%), UK grew (+13%), Continental Europe grew (+10.1%). Among emerging markets, Latin America grew (+20.6%), Middle East & Africa grew (+7.3%), India grew (+7%), and Asia Pacific grew (+5.5%).
On a full year basis, among major markets, North America grew (+17.5%), Continental Europe grew (+15.1%) and UK grew (+14.3%). In emerging markets, Latin America grew (+18.2%), India grew (+16%), Middle East & Africa grew (+12.9%) while Asia Pacific grew (+6.7%) growth.
Services: Demand continued to be strong during the quarter as well as the full year across all markets, industries, and services, with growth led by Cloud, Cyber Security, Enterprise Application Services and IoT & Digital Engineering.Industries: All verticals grew in the mid to high teens. Growth was led by Retail and CPG (22.1%), Manufacturing vertical (+19%) and Communications & Media (+18.7%). Technology & Services grew (+18%) and Life Sciences and Healthcare grew (+16.4%) while BFSI grew (+12.9%).
- Consulting & Services Integration: C&SI continues to play a strategic role for many customers in accelerating their growth and transformation journeys. Supply chain momentum focused on optimizing and automating fulfillment and distribution processes. Consulting-led cloud modernization services continued to see strong demand. Global M&A activity drove continued growth for related services during the quarter.
- Cloud Platform Services: The multi-year technology cycle fueled by cloud adoption continued apace. Clients are investing to build a new future-ready digital core, reduce technology debt, host mission-critical workloads, provide a unified view and advance on their sustainability goals. Key services which led growth are application modernization leveraging cloud native application development, data platform modernization and migration services.
- Digital Transformation Services: There was robust demand for ERP transformation and modernization, intelligent products, connected plants, connected health, managed security services, design led customer experience transformation and sustainability. There was increased adoption of enterprise cloud solutions in the areas of e-commerce and customer experience across sales and service channels, supply chain, human capital, analytics and significant back-office transformation. TCS Crystallus™ continues to find strong resonance with customers for their industry innovations. As governments strengthen the privacy laws and minimize risk of data leakage due to ransomware, TCS’ “Privacy by Design” offering is gaining traction.
- Cognitive Business Operations: There were multiple deal wins powered by MFDM™ and Cognix™ for digital transformation of operations in the areas of data center and networks, finance and supply chain and customer experience. Other themes driving the growth in this quarter include integrated application and infrastructure operations and vendor consolidations. TCS Cognix™ continued to make strong strides with the installed base crossing 200 customers.
Mohit Kaushik, Associate Principal Analyst, Gartner
“Automation and digitization initiatives have taken a center-stage as digital investments continue to accelerate across businesses. The growth in IT spending on digital business solutions, security, cloud and analytics is a golden opportunity for IT service providers. The fourth quarter results of TCS reaffirm this as the company presents strong growth across all industry verticals. As revealed in Gartner research, the banking, finance and insurance vertical (BFSI), will continue to be a top IT spender worldwide. It is clearly also the largest revenue driver segment for TCS.
Moving forward, there will be heightened demand for products that drive digital revenue, improve operating margins, improve workforce productivity and enhance customer experience”.