Strong Revenue Growth and Margin Expansion Mark TCS Q2
NEW YORK and MUMBAI, India, Oct. 7, 2020 /PRNewswire/ -- Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading global IT services, consulting and business solutions organization, reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending September 30, 2020.
Highlights of the Quarter Ended September 30, 2020
* Excludes provision of $ 165 Mn towards legal claim
Commenting on the Q2 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "Driving accelerated business value realization of our customers' digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future."
He added: "What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilized to create innovative new business models and differentiated customer experiences. Our investments in building deep expertise on these platforms, in research and innovation and in industry-specific solutions leveraging our contextual knowledge, position us very strongly to benefit fully from this secular demand driver."
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "Our all-round performance this quarter is a huge endorsement of the increased relevance of our services and solutions to our clients as they pivot from risk mitigation to long-term resilience powered by cloud, digital and simplification of working methods. Clients are partnering us to leverage our thought leadership in SBWS™, Vision 25 x 25™ and Location Independent Agile™ to build a resilient, adaptable and future-proof operating model."
He added: "Accessibility and Touchless are becoming important attributes for solution design, and our products and platforms continue to gain traction. Besides core systems transformation, our Quartz Blockchain Solution is the choice of a leading bank and a market infrastructure player for inter-bank lending, crypto assets and for enabling real-time settlements."
V Ramakrishnan, Chief Financial Officer, said: "We have always maintained that growth is the best margin lever, and that is very evident in our numbers this quarter. It is very gratifying to see every financial metric precisely where we would like it to be, with a stellar operating margin despite neutral currency, strong cash conversion, and lowest ever DSO. We continue to invest in our people and are doubling down on building newer capabilities to power the next leg of our growth and market share expansion."
Q2 Segment Highlights**
Industries: BFSI (+6.2%), Retail and CPG (+8.8%) and Life Sciences and Healthcare (+6.9%) led the growth. Technology & Services grew 3.1%, Manufacturing +1.4% while Communications & Media de-grew by 2.4%.
Markets: All markets showed good sequential growth, with North America growing 3.6%, UK +3.8%, and Continental Europe +6.1%. Emerging markets also grew well, with India growing 20%, MEA +8%, Latin America +5.5% and Asia Pacific +2.9%.
Services: A surge in future-focused discretionary investments for growth and transformation drove a strong, broad-based rebound in growth across industry verticals and geographies, led by Cloud & Security, Analytics and Cognitive Business Operations.
** Growth in QoQ CC
Research and Innovation
TCS' consolidated headcount stood at 453,540 as of September 30, 2020, with a diverse workforce comprising 147 nationalities, and women constituting 36.4% of the base.
TCS' continued investments in organic talent development, focus on upskilling and innovative training methods have resulted in industry-leading outcomes. TCSers logged in 10.2 Mn learning hours in Q2, a 29% increase over the prior quarter. Over 352,000 employees have been trained on multiple new technologies, and over 427,000 have been trained on Agile methods.
Investments in people, progressive HR policies and an empowering culture have made TCS the global industry benchmark in talent retention. In Q2, its IT services attrition rate (LTM) was at 8.9%, an all time low.
"We want to thank all TCSers for the incredible resilience they have shown during these trying times. We are happy to announce that we will be rolling out salary increases, effective October 1st. We started onboarding freshers, and increased our recruitment globally in Q2, in anticipation of the growth trajectory we see ahead," said Milind Lakkad, Global Head, Human Resources.
He added: "We continue to focus on the physical and emotional wellbeing of our employees. With increasing caseloads, we are enabling TCSers and our clients to continue working remotely, with our SBWS™ model. To support employees and their families during the pandemic, we have invested in setting up medical helplines, ambulance services and first-line COVID isolation centers within TCS premises at 11 cities across the country. We have also ramped up our employee engagement and outreach. Our OneTCS channel has hosted inspirational leaders, mental health experts, virtual town halls and global talent hunt competitions, all designed to reduce stress and the feeling of isolation, and to boost morale. We are also providing self-help and counseling services which were availed by nearly 8,000 TCSers in Q2."
Awards and Recognition
IFRS Financial Statements
*excludes legal claim provision (refer note 19 to Financial Statements)
About Tata Consultancy Services Ltd (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world's largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent AgileTM delivery model, recognized as a benchmark of excellence in software development.
A part of the Tata group, India's largest multinational business group, TCS has over 453,000 of the world's best-trained consultants in 46 countries. The company generated consolidated revenues of US $22 billion in the fiscal year ended March 31, 2020, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at www.tcs.com.
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SOURCE Tata Consultancy Services