- Strongest Third Qtr Growth in 9 yrs: +4.1% QoQ CC, +4.7% INR, +5.1% USD
- Back to Positive YoY Growth: +0.4% CC, +5.4% INR, +2.1% USD
- Operating Margin: 26.6%, +0.4% QoQ and +1.6% YoY
- Net Profit Growth +3.7% YoY
- Lowest Ever Employee Attrition in IT Services (LTM): 7.6%
MUMBAI, January 8, 2021: 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 December 31, 2020.
Highlights of the Quarter Ended December 31, 2020
- Revenue at $5.702 Bn, +5.1% QoQ, +2.1% YoY
- Constant Currency revenue growth: +4.1% QoQ, +0.4% YoY
- Net Income at $1.18 Bn, +3.4% QoQ, +3.7% YoY
- Operating Margin at 26.6%; Net Margin at 20.7%
- Strong Cash Conversion: Net Cash from Operations at $1.62 Bn | 137.4% of Net Profit
- Consolidated headcount: 469,261 | Net addition: 15,721 | Women in the workforce: 36.4%
- 366K+ employees trained in new technologies; 444K+ on Agile methods
- IT Services attrition rate dips to a new all-time low, at 7.6% LTM
- Interim Dividend per share: `6.00 | Record date 16/01/2021 | Payment date 03/02/2021
Commenting on the Q3 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said:“Growing demand for core transformation services and strong revenue conversion from earlier deals have driven a powerful momentum that helped us overcome seasonal headwinds and post one of our best performances in a December quarter. We are entering the new year on an optimistic note, our market position stronger than ever before, and our confidence reinforced by the continued strength in our order book and deal pipeline.”
He added: “Looking beyond the immediate business growth opportunity, we are tremendously excited by what lies ahead. Cloud is enabling a new class of boundaryless organizations, that can seamlessly partner and collaborate within larger ecosystems to create innovative purpose-driven offerings to customers. This boundaryless value creation, supported by the seamless fabric of technology enabled by cloud together the seamless fabric of talent enabled by our SBWS™, will redefine industry after industry over the longer term. Our intimate knowledge of our customers’ business contexts, our strong relationships across ecosystems, and our continued investments in research and innovation make us their preferred partner in their growth and transformation journeys.”
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “Our Q3 growth is a very satisfactory outcome of our ability to leverage the proactive investments made to capture the strong demand and be meaningful to our clients. It is a strong endorsement of our resilience, way of working and the relative competitiveness of our products and services. We celebrated the accomplishment of our Enterprise Agile by 2020 vision during the quarter, and with SBWS™, we have a well-oiled location-independent execution model that brings in the resources just in time, efficient execution, and machine-led delivery governance that are delighting our customers. All these augur well to progress our 25×25 future of work vision.”
He added: “We have had healthy deal closures and the growth has been broad based on a sequential basis, setting ourselves well for the future. We also welcome to the TCS fold, the professionals from Pramerica and Postbank Systems, accelerating our growth plans in Ireland, Germany and more broadly in Europe.”
V Ramakrishnan, Chief Financial Officer, said: “Strong growth across all our verticals, and operational benefits from our SBWS model allowed us to post the highest operating margin in the last five years, even after rolling out a salary increase this quarter. We also had an all-time high cash conversion in Q3. This and our strong balance sheet position us very strongly to seize the opportunities that the current market offers, and more closely partner our customers in their growth and transformation journeys.”
Human Resources
TCS’ consolidated headcount stood at 469,261 as of December 31, 2020, with a diverse workforce comprising 147 nationalities, and women constituting 36.4% of the base.
TCS’ investments in skilling and developing its workforce, and the use of innovative training methods, continue to deliver industry-leading outcomes. Over 366,000 employees have been trained on multiple new technologies, and over 444,000 have been trained on Agile methods.
The company’s people culture, and world-leading HR practices have made it the global industry benchmark in talent retention. In Q3, its IT services attrition rate (LTM) was at 7.6%.
“While continuing to stay closely focused on employee engagement and morale, we are now gearing up for growth. Our sustained investment in organic talent development is now paying rich dividends, helping us support our business growth. We are also continuing along our journey to reimagine and transform the HR value chain, leveraging technology innovatively to digitize processes, virtualize interactions, and enhance responsiveness. These initiatives for entry-level hiring, training and onboarding were so successful, we are now rolling out similar models for mid-level hiring and incremental reskilling. All this has resulted in a superior employee experience, while materially driving up our throughput,” said Milind Lakkad, Chief Human Resources Officer.
Key Highlights•
Selectedby a subsidiary of one of the world’s largest chemical companies, for delivering next generation private cloud services with TCS Enterprise Cloud. TCS will migrate and transform existing data center workloads and enable flexible cloud infrastructure and services, for faster time to market and greater operational efficiencies. TCS will also harmonize, integrate the B2B commerce capabilities of the combined organization resulting from a merger. This is expected to result in a unified customer anddistributor experience, ability to drive growth through more effective engagement practices and increased order volume handling.
“As we look to adapt and scale our business in response to the global pandemic, it has never been more important that we improve operational efficiencies and transform our global IT infrastructure to become more agile. With TCS, we look forward to accelerating the development of new enterprise applications and customer features and deploying machine learning models, to allow us to introduce new services that reimagine the global travel experience for the millions of airline customers we serve across the world.”Jeffrey Goh CEO, Star Alliance“
We have always been an early adopter and pioneer in the usage of new age technology and us signing up with TCS is another trend-setting initiative, which we believe will soon be emulated by other banks and insurance firms in Israel. Rolling out new technology such as Quartz Blockchain to digitize bank guarantees will help our customers with simpler, easier, transparent and optimized processes. With this solution, we will be extending our client base to include corporates, SMEs and individuals who will soonbe able to access their digital bank guarantees across its life cycle through APIs and an intuitive web portal.”Dov Kotler CEO, Bank Hapoalim“
Our partnership with TCS has provided our business the ability to create new and flexible subscription products for our customers that seamlessly integrate into our existing IT landscape. TCS has consistently delivered on time and on budget during very trying times, and the business value delivered has enhanced our capabilities for managing, reporting, and supporting our customers.”Daniel AdamCIO, Extreme Networks
We look forward to continuing our strategic partnership with TCS and accelerating our aspiration of becoming a digital first retailer by leveraging their deep contextual knowledge of our business, global Retail industry experience and their expertise in the next generation technologies.”Andy WolfeGroup CIO, Kingfisher plc
We have made good progress and continue to build momentum in our Cloud Transformation Program. Partnering with TCS helped us reduce risks and accelerate the migration, meeting our stretch targets. Once we complete this program, AGL will be very well placed to deliver superiorcustomer experiences and drive growth.” Owen RaposeHead of Cloud Technology, AGL
At AG, we’ve always prided ourselves in offering superior service to our customers and distribution partners. With customer expectations continuing to grow and evolve, along with the size of our organization, we needed an IT partner who had expert domain knowledge of the insurance sector and the flexibility to adapt to our unique needs. After an initial positive experience with successful delivery of projects such as www.yongo.be, TCS is well positioned to become a strong long-term partner for day to day IT operations as well as IT transformation projects. We expect to leverage on TCS’s global Innovation ecosystem and experience to increase efficiency and build differentiating experiences in the market we operate.”Philippe Van Belle, Business Operating Officer, AG
Volt’s unique platform technology places it at the forefront of Australian banks and positions us well for incredible growth into the future.“Operating in a highly regulated industry and the goal of becoming a market leader has led Volt to partner with exceptional global technology players like TCS whose commitment to continuing innovation will ensure Volt’s banking platform remains cutting-edge.”Steve Weston Founder and CEO, Volt
“BDB’s digital transformation program is a key pillar of delivering on the Bank’s vision to build BDB as a sustainable, industry leader and trusted partner for entrepreneurs in Bahrain, helping them to grow their businesses into successful and regionally competitive enterprises. With the full solution stack being implemented byTCS, BDB will be able to transform our clients’ experience delivering new channels, and innovative products. With this visionary project Bahrain is once again leading the way in adopting full digital core banking on cloud, delivered using a SaaS model thereby assuring that the Bank is always at the cutting edge of technology.”Sanjeev PaulGroup CEO, Bahrain Development Bank“
We were impressed by the start-up friendly aspect of Quartz and the solution’s technical capability to help us launch to aggressive timeframes and support our vision of geographical expansion. The objective is to support numerous merchant venues and redefinehow they deliver services, and in the process increase customer loyalty. The solution from Quartz provides a hybrid network that allows our customers to pre-order goods and services from merchants utilizing the rewards on the private blockchain network and manage the Zap tokens on the public network simultaneously.”Elliot HallFounder CEO & Chairman, Zapaygo
