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TCS’ Q1 Performance Reflects Continued Growth Momentum
Revenue at `52,758 crore | Growth of 16.2% YoY, +15.5% in CC
North America (+19.1% CC), Retail (+25.1% CC) lead among segments
Order Book at $8.2 billion | Book to Bill at 1.2
Stellar client metrics: 9 new clients added to the 100Mn+ band YoY; 19 clients added to the $50Mn+ band
Workforce crosses the 600K milestone: Headcount at 606,331
MUMBAI, July 8, 2022: Tata Consultancy Services (BSE: 532540, NSE: TCS) 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%.
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.
** Year on Year Growth in Constant Currency terms
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-a-Service (SaaS) technologies and expanding its enterprise integration platform.
Customer Speak
“We are delighted to be partnering with TCS to help support the transformation of our service. We share a common desire to create digital channels that make a difference in serving all our customers, both businesses and consumers, by increasing accessibility to our service and improving our response times. Working with a world leader in technology services and digital delivery, whose values reflect our own, is a significant milestone in our digital journey and we are looking forward to delivering on our ambitious plans.”
- Nicola Wadham
CIO, The Financial Ombudsman Service
“We are very pleased with the successful integration of the Erber Group into DSM, helping transform our Animal Nutrition and Health business. TCS contributed greatly to this success, especially in re-designing the enterprise model to drive integration synergies. TCS demonstrated a solid mix of strategic thinking, execution skills, and people-savvy collaboration which made this engagement so impactful.”
- Luke Glennon
M&A Integration Leader, DSM
“TCS is truly a collaborative and strategic partner that helped develop our technology platform. Our vision is "Powering the safest and most seamless customer experience of any global alliance". TCS brings transformational ability driven by its technology and domain experience globally, which is essential for our success”.
- Andy Lui
CIO, Sky Team
Research and Innovation
As on June 30, 2022, the company has applied for 6,752 patents, including 169 applied during the quarter, and has been granted 2,400 patents.
Human Resources
TCS’ workforce stood at 606,331 as on June 30th, a net addition of 14,136 during the quarter. The workforce continues to be very diverse, comprising 153 nationalities and with women making up 35.5% of the base.
TCS continues to invest in organic talent development as part of its expansion into the growth and transformation opportunity. In Q1, TCSers clocked 12 million learning hours, resulting in the acquisition of 1.7 million competencies.
The company gradually accelerated its return to office program in Q1, with about 20% of the workforce now working from office. IT services attrition was 19.7% on the last twelve months’ basis.
Awards and Recognition
Business Leadership:
Ranked #1 in customer satisfaction in the UK, for the seventh year by Whitelane Research, with an overall customer satisfaction score of 82%.
Ranked #1 by revenue in the UK across the entire technology ecosystem for the second year, in the 2022 TechMarketView UK Software and IT Services Supplier Rankings.
Ranked #2, up one place over the prior year’s position, in CRN’s 2022 Solution Provider 500 rankings of the top system integrators, service providers and IT consultants by revenue in North America.
Only brand from India in the Top 50 in the 2022 Kantar BrandZ Top 100 Most Valuable Global Brands; also ranked among the Top 10 fastest growing brands globally.
Won the Supplier of the Year award in the Large Category (by spend) at the 2022 Microsoft Supplier Prestige Awards.
Won a record of 3 awards at the India Risk Management Awards (IRMA) 2022 by ICICI Lombard and CNBC-TV18 for 'Masters of Risk in IT-ITes' under the Large Cap category and two specialized categories - Masters of Risk in Regulatory Compliance and Masters of Risk in Cyber Security
Won 6 Gold and 2 Silver awards at the 14th Annual 2022 Golden Bridge (Globee) Business and Innovation Awards in the following HR categories: Achievement of the Year in Learning and Development, Best Use of Reward and Recognition, Most Effective Use of HR Technology, Most Effective Use of Internal Communications, Human Resources Outstanding Performance of the Year and Human Resources Project or Initiative of the Year. Innovation and IP
OmniStore™ won the Omnichannel Technology of the Year award from Retail Systems for delivering a seamless customer experience.
Quartz™ for Markets recognized as Best New Post Trade Solution of the Year by Financial Technologies Forum.
The TCS Smart Store solution won the Best Customer Solution award at the IoT Solution Awards 2022 during the IoT Solutions World Congress.
Won 5 Bronze awards for innovation and transformation at the Stevie American Business awards 2022 in the following categories: Lead Generation (TCS Insights to steer marketing enabled sales), Business or Competitive Intelligence (TCS Analytics Transformation), Personal Information (PI) Regulatory Compliance (TCS Privacy), Mobile On-Demand Application (TCS Mobility Solution) and Artificial Intelligence/ Machine Learning (TCS Virtual Assistant)
TCS Marketing Data Hub won the Economic Times DATA CON Awards 2022 for Automated Data Management.
CS Design Toolkit was awarded a Bronze award at the Stevie Awards Asia Pacific 2022 for Innovative Achievement in Customer Satisfaction.
Sustainability
TCS’ Technologies for Earth Regeneration & Rejuvenating the Atmosphere (TERRA) won the Excellence in Smart Tech Award under the established IT and technology services companies’ category at the IMC Digital Technology Awards 2021
TCS’ Food Digital Twin won the 2022 Vivekananda Sustainability Award for ‘Innovative Use of Technology for Environmental Improvement’
Won first place at the Celonis Ecosystem Hackathon for Smart Metering for Utilities to Reduce CO2 Emissions under the Use Case Ideation category
Named as one of the top 50 community-minded companies in the United States; recognized as the Information Technology Sector Lead for the fourth year and honored with the Strategic Volunteer Award for aligning employee volunteer time and talent with its strategic CSR programs.
Won the Gold award in the WASH Initiative category at the 6th CSR Health Impact Awards for TCS’ IoT-based smart water management solution in support of the Government of India’s Jal Jeevan Mission. Partner
Won three 2022 Microsoft Partner of the Year awards in the categories: SAP on Azure, Retail & Consumer Goods, and Global SI & Advisory Digital Transformation.
Won two Google Cloud Partner of the Year 2021 awards in the categories: Industry Solution Partner of the Year for Retail and Global Diversity & Inclusion Partner of the Year.
Won ANZ 2022 AWS Partners of the Year award in the category Global Systems Integrator.
TCS Interactive won the Digital Experience (DX) Partner of the Year 2022 award from Adobe.
Recognized as Global Partner of the Year 2022 by Beyond Trust.
Won Pega's Industry Excellence Award for Financial Services at the PegaWorldiNspire 2022.
Awarded Partner of the Year 2022 by Creatio for outstanding commitment to partnership and implementation of solutions.
Named the 2021 IFS Solutions Partner Of The Year and Services Partner Of The Year.
Named Intel Global System Integrator Partner of the year 2022.
Won Qlik Global Transformation Awards 2022 for Partners Leveraging Active Intelligence for Transformation and Impact
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