Strong Digital Demand Drives Double Digit Growth at TCS
MUMBAI, India, July 9, 2019 /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 June 30, 2019.
Financial Highlights for Quarter Ended June 30, 2019
-- Revenue at $5,485 Mn, +8.6% YoY
-- Constant Currency revenue growth: +10.6% YoY
-- Net Income at $1,168 Mn, +8% YoY
-- Operating Margin at 24.2%; Net Margin at 21.3%
-- Earnings Per Share at $0.31, +10.2% YoY
-- Net Cash from Operations at 103.9% of Net Income
-- Dividend per share: $ 5.00
Record date 17/07/2019; Payment date 23/07/2019
Business Highlights for Quarter Ended June 30, 2019
-- Digital revenue: 32.2% of total, +42.1% YoY
-- UK, Europe and India lead growth: +16% YoY, +15% YoY and +15.9% YoY
respectively
-- Continued investments in organic talent development:
-- Net addition of 12,356 employees: highest in 5 years
-- 315K+ employees trained in digital technologies
-- 361K+ employees in Agile methods
-- Industry-leading talent retention: IT Services attrition rate at 11.5%
LTM
Commenting on the Q1 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "We have had a steady start to the new fiscal year. We see customers continuing to spend on their growth and transformation initiatives, and that is showing in our strong order book and deal pipeline this quarter."
He added: "We are benefiting significantly from enterprises investing in Customer Experience to differentiate themselves in a Business 4.0(TM) world. Our lean forward strategy is working well and our customers are benefiting from the TCS innovation ecosystem. Customers appreciate our end-to-end capabilities, and our holistic approach to transforming customer journeys that enable rapid product innovation and speed to value."
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "We continue to execute well and delivered some significant transformation programs to our customers during the quarter. Our platforms for the financial industry are doing well. I'm particularly pleased that our TCS BaNCS Global Securities Processing platform is the choice of two large global financial institutions during the quarter."
He added: "Our diversified industry presence, comprehensive digital offerings, and agile way of working, coupled with our Business 4.0 framework, enable us to stay relevant to our customers. We are confident of the future as we embrace deeply the Machine First(TM) philosophy in delivering experiential and modern solutions to our clients."
V Ramakrishnan, Chief Financial Officer, said: "We continue to invest in deepening our capabilities to help our customers in their transformation journeys. Additionally, our margins this quarter fully reflect the annual increments that we effected across the board in April. Sustained rigor in operations helped deliver strong cash conversion and EPS expansion."
Q1 Segment Highlights
Industries: Revenue growth was broad-based across verticals. Life Sciences & Healthcare led the pack, growing 18.1%. The other verticals - BFSI (+9.2%), Retail & CPG (+7.9%), Communications & Media (+8.4%), Technology & Services (+7.8%) and Manufacturing (+5.5%) - all showed industry-leading growth rates.
Markets: Growth was led by UK (+16%), India (+15.9%) and Europe (+15%). Other markets showed good momentum: North America (+7.7%), Asia Pacific (+9.5%), MEA (+6.4%) and Latin America (+6.4%).
Services:
-- Consulting & Services Integration: Customer Experience and Enterprise
Agility are emerging as the top C-level priorities and helped drive
strong growth for TCS' CX transformation services and enterprise agility
strategic consulting in Q1.
-- Digital Transformation Services: Strong growth in IoT, cybersecurity,
and consulting and services integration as customers look to transform
to Business 4.0 enterprises. TCS' ability to address the strategic needs
of all key stakeholders, and Location Independent Agile Methodology are
serving as strong differentiators.
-- Cognitive Business Operations: This area saw strong growth led by
digital customer experience management, digital F&A, business cloud
aligned solutions, and operations at the edge.
Key Highlights
-- Selected by one of the leading financial services groups in Finland, for
a multi-year digital transformation and orchestration of its IT
ecosystem, to improve quality of services, customer experience and
overall security posture. TCS will integrate its Enterprise Cloud
Platform, application operations & security services for improved
business service availability, reliability, efficiency, increased
productivity & predictability by leveraging TCS ignio(TM)'s advanced
machine learning & cognitive technologies.
-- Engaged by one of the largest car rental companies in the world, as the
strategic partner for a multi-year engagement to provide infrastructure,
application management and quality engineering transformation services.
-- Selected by a large European bank, as a strategic partner for operating
model transformation across application development, application
management and infrastructure services leveraging agile methods and
DevOps. TCS will modernize the IT portfolio to drive core banking
monetization (Bank as a service), GDPR compliance, improve efficiency,
reduce system complexity, improve product innovation, reduce time to
market and provide connected & personalized experience to customers.
-- Engaged by a large Swiss multinational healthcare company, as a
strategic partner to provide global infrastructure management (including
data centres) and platform services across the enterprise.
-- Engaged by a leading financial institution, to leverage the ecosystem of
partners to setup an API Management solution and an API marketplace
using TCS Melting Pot solution, which will allow charging for services
through an economy-based consumption and gamified subscription model.
TCS is also collaborating to develop and implement a Digital Playbook, a
roadmap for a Unified Experience platform by leveraging Design Thinking.
-- Engaged by, a major US airline, as a strategic partner for a multi-year
engagement to provide application management and quality assurance
services.
-- Selected by an American entertainment company, for a multi-year
partnership to provide digital transformation covering Analytics,
Finance, Technology modernization, Agile & DevOps, and application
management services.
-- Engaged by one of the major Australian telecommunications companies, to
transform the customer experience, deliver greater efficiency and
improve Net Promoter Score using a TCS-built Digital Twin supported by
Cognitive and AI-enabled automation interventions powered by TCS Machine
First Delivery Model (MFDM(TM)).
-- Selected by a grocery retailer in Denmark, as the partner for the
modernization of its legacy applications & workload management services
leveraging TCS MFDM(TM) and TCS ignio(TM) to automate processes, deploy
industry best practices, improve governance, and drive innovation.
-- Selected by a US healthcare provider, as the partner for transforming
its infrastructure operations by leveraging cognitive automation with
the TCS MFDM(TM) and TCS ignio(TM) to automate operations, improve
efficiency, and drive continuous service improvement.
-- Selected by one of the major US based commercial insurers, to modernize
their Contact Center platform with additional voice & non-voice channels
and extended self-service capabilities by leveraging cloud,
conversational AI and integration technologies to provide better
experience and engagement for their end customers and users.
-- Chosen by an European airline, as the strategic partner to deliver a
transformed Digital-First customer experience through a new Enterprise
Distributed Agile Model leveraging TCS MFDM(TM) and TCS ignio(TM), in
addition to providing application management & support services.
-- Selected by a large airline group in South America, to transform
customer experience on its omni-channel digital commerce platforms with
TCS Interactive design, implementation & maintenance services
-- Chosen by a US-based financial services firm for authorized dealers and
franchisees, to transform customer experience by modernizing their
digital marketing platform with a leading customer experience management
(CXM) solution for scalable, industry-best and cross-channel marketing,
advertising, analytics and commerce capabilities.
-- Engaged by a US airline, as their strategic partner to help realise
their Digital 2020 vision for transforming the customer experience. TCS
will leverage a design-integrated agile engineering model to transform
crew and employee channels to enable them to deliver an outstanding
traveler experience.
-- Selected by a leading medical devices company, to develop a Hyperledger
Fabric blockchain solution to track products for sterilization from
manufacturing through distribution for efficient process automation and
improved movement visibility across stakeholders.
-- Selected by a large American infrastructure and services provider, as a
strategic partner to provide Technology Consulting and Digital
Transformation services to deliver business insights by modernizing the
Data & Analytics platforms.
-- Selected by a leading US financial institution, for data lake platform
modernization engagement leveraging leading enterprise cloud platforms
with multiple solution accelerators to achieve effective campaign
management, better management of credit risk, increased cross-sell and
business growth, and improve the customer centricity, service and
engagement.
-- Selected by a leading UK-based insurance company, to transform their
marketing campaign management by leveraging TCS contextual,
technological and digital marketing capabilities for enabling faster
time to market. TCS will also help the bank to stay ahead of the curve
and drive business insights at scale by accelerating its data
modernization journey by transforming to a modern architecture on the
cloud.
-- Selected by a leading American multinational confectionery, food, and
beverage company, to improve the security infrastructure across its
plants. TCS will standardize the current security landscape and provide
IoT-based remediation services to minimize vulnerabilities and reduce
plant down time.
-- Selected by a leading American chemical conglomerate, for improving
their plant safety by leveraging IoT-based TCS Digifleet solution that
enables real-time tracking of vehicle movement and safety compliance
within their facilities.
-- Chosen by a leading Industrial Air Filtration (IAF) company, as its
strategic partner of choice to design, build and deploy their IoT
Platform-based Connected Solutions program for Condition Monitoring,
Predictive Maintenance and Automated Service Ordering & Predictive
Analytics to facilitate better services to their end customers based on
real-time data & business insights, and improve their product
capabilities and designs.
-- Selected by a US-based chain of beauty stores, to implement state of the
art processes by leveraging a leading ERP platform, driven by the
management's imperative of international expansion and omni channel
strategy. The new best-in-class international operations platform, to be
deployed using TCS agile methodologies & frameworks, will help
centralize and manage their global financial and retail processes to
achieve growth ambitions, increase visibility, drive faster time to
market and reduce cost to serve.
-- Selected by a global semiconductor manufacturer, for a strategic
initiative to prioritize marquee customers with better supply chain
metrics. TCS will create an independent digital supply chain platform
leveraging a leading enterprise solution interfacing with public cloud
platforms.
-- Engaged by a global US based healthcare company, for a global digital
transformation program for process standardization and simplification
leveraging a leading ERP and TCS pre-configured solutions, to improve
the organization's ability to respond quickly to market opportunities,
while enhancing efficiency and reducing operational complexity.
-- Engaged by a US-based manufacturer of industrial test, measurement and
diagnostic equipment, as the partner for its finance & enterprise
performance management program, by modernizing its business processes
and leveraging a leading Cloud ERP platform to provide enhanced business
insights & analytics driven decision making, and support its business
acquisition strategy, seamless financial consolidation and
reconciliation.
-- Engaged by one of the world's largest auto makers, as the partner for
modernizing their CRM portfolio in Latin America for enabling superior
customer experience & feature rich services, leveraging a leading
enterprise service cloud and agile methodology.
-- TCS Enterprise Cloud Platform was selected by a leading Central Data
Services Provider (CDSP) for the gas industry in the UK, as the
strategic platform to transform their IT landscape using cloud
technologies.
-- Selected by a leading global financial services and communications firm,
for enterprise wide application modernization of its core & boundary
systems by leveraging a leading cloud platform and a microservices based
architecture for enabling future business expansion.
-- Selected by one of the largest travel agencies in the Middle East, to
implement Identity and Governance management leveraging industry-leading
tools for enhanced control on auditing, compliance and segregation of
duties, reduced efforts on user administration tasks, centralized view
of users and access rights, enhanced control on privileged users, and
reduced identity related security risks.
-- Engaged by a leading American multinational investment bank and
financial services company, for infrastructure security modernization
and security operations in a managed security services model for reduced
risk, greater efficiency and compliance to global information security
program policy. TCS has also been engaged for their Enterprise-wide
Agile transformation program where TCS will automate application
deployment through DevOps, to address the need for faster time to
business value and train key project personnel.
-- Chosen by a Canadian multinational banking and financial services
corporation, to provide end-to-end Quality Engineering services
leveraging TCS CX Assurance & SmartQE platforms for its Channels
Business with the objective of reducing time to market, increasing test
quality and improving efficiency.
"The successful deployment of TCS BaNCS for our commercial lending business marks the next phase of our digital transformation strategy. With TCS BaNCS, we have been able to retire multiple core legacy systems and provide a unified, customer-centric view of information and transactions across our affiliate banks, while also retaining their individual branding...We will now be better positioned to evolve with our customers' needs in the future and launch new products and services. The centralization of our operations on TCS BaNCS is helping us enhance customer and employee experience and leverage data for insightful analytics and intelligent decision-making."
Scott McLean
President and COO, Zions Bancorporation
"Nielsen and TCS are entering into a new phase of transformative collaboration where Machine First Delivery is our mutual future."
David Kenny
CEO, Nielsen
"Becoming a truly digital-first airline is a key part of our long-term strategy... Our new strategic partnership with TCS will help us to realize the potential of technologies such as cloud, AI and automation, which are key pillars on which our future growth will be based. TCS' cognitive automation software, ignio(TM) and Machine First(TM) Delivery Model will improve customer service, reduce response times for customer queries, and deliver new insights for business decision-making, while providing enhanced levels of stability and security."
Mattias Forsberg
CIO, SAS
Research and Innovation
As on June 30, 2019, the company has applied for 4,682 patents, including 86 applied during the quarter and has been granted 1,022 patents.
Human Resources
Strong hiring in Q1 resulted in a net addition of 12,356 employees, the highest in the last five years. The company has issued joining letters to over 30,000 fresh graduates. Forty percent of them have been onboarded in Q1 and the rest are expected to join by Q2.
Consolidated headcount stood at 436,641 as of June 30, 2019. With continuing initiatives to attract the best local talent across major markets, the workforce is becoming more diverse. The percentage of women in the workforce rose further to 36.1%, while the total number of nationalities represented grew to 149.
TCS continues to invest heavily in organic talent development. At the end of Q1, over 315,000 employees had been trained on multiple new technologies, and over 361,000 had been trained on Agile methods.
The company continues to be the industry benchmark in talent retention, with the IT Services attrition rate (LTM) at 11.5%.
"The vibrant, enriching workplace and best-in-class retention rates at TCS are a key competitive differentiator. Customers value the lower attrition because it results in greater stability and fewer disruptions in our service delivery. Moreover, TCS account teams are better placed to retain the contextual knowledge gained over time, and use that to build differentiated solutions tailored to each customer's unique requirements," said Milind Lakkad, Global Head, Human Resources.
Awards and Recognition
-- The TCS' BaNCS Network Solution powered by Quartz Blockchain - that lays
the foundation for an innovative pan-African financial ecosystem for
cross-border information exchange and transaction settlement - was named
the Best Blockchain Breakthrough of the Year at the 2019 FTF News
Technology Innovation Awards
-- Won two awards for Intellectual Property creation:
-- The National Intellectual Property Award 2019 in the category 'Top
Public Limited Company/ Private Limited Company for Patents &
Commercialization in India', and
-- The World Intellectual Property Organization's (WIPO's) IP
Enterprise Trophy
-- Recognized as a Business Superbrand in the UK, fifth year in a row, for
brand reputation, deep relationships with customers, thought leadership,
and community Initiatives
-- TCS' cognitive automation software, ignio(TM), received the Artificial
Intelligence Excellence Award in the Self-Awareness category, from the
Business Intelligence Group
-- Recognised in DiversityInc's Top 50 Companies for Diversity in America
for its Investments and Efforts in Diversity and Inclusion, Leadership
Accountability, Talent Programs, and Workplace Practices
-- Named America's Most Community-Minded Information Technology Company for
the second consecutive year, in the 2019 Civic 50 by Points of Light,
the world's largest organization dedicated to volunteer service
-- Won 4 Stevies at the 2019 American Business Awards®- 1 Gold Stevie each
for Corporate Social Responsibility Program of the Year and Fastest
Growing Tech Company of the Year, 1 Silver Stevie for Mobile Marketing
Campaign of the Year, and 1 Bronze Stevie for Human Resources Department
of the Year
-- TCS New York City Marathon App won the MediaPost Appy Award in the
'Entertainment and Sports' category
Partner:
-- Recognized by Adobe as the Customer Success Partner of the Year at
Adobe's India Symposium 2019
-- Recognized for Excellence in Digital Transformation in the 2019 Pega
Partner Awards, for developing and delivering digital process automation
(DPA) solutions for clients within the financial services industry.
IFRS Financial Statements
U
naudited Condensed Consolidated
Statements of Comprehensive Income
For the three-month periods ended June 30, 2018, and
June 30, 2019
(
$ Million
, except per share data)
Three-month period Three-month period
ended ended
Jun 30, 2018 Jun 30, 2019
---
Revenue 5,051 5,485
---
Cost of
revenue 2,961 3,265
---
Gross margin 2,090 2,220
---
SG & A
expenses 826 895
---
Operating
income 1,264 1,325
---
Other income
(expense),
net 178 203
---
Income before
income taxes 1,442 1,528
---
Income taxes 357 357
---
Income after
income taxes 1,085 1,171
---
Minority
interest 3 3
---
Net income 1,082 1,168
---
Earnings per
share in $
0.28 0.31
---
Unaudited Condensed Consolidated Statements of Financial Position
As of March 31, 2019 and June 30, 2019
($ Million)
As of March 31, 2018 As of June 30, 2018
---
Assets
---
Property and equipment 1,685 1,663
---
Right-of-use Assets 0 911
---
Intangible assets and
Goodwill 581 588
---
Accounts Receivable 3,969 4,075
---
Unbilled Revenues 1,298 1,433
---
Investments 4,243 4,438
---
Cash and Cash equivalents 1,045 821
---
Other current assets 2,908 2,809
---
Other non-current assets 1,207 1,260
---
Total Assets 16,936 17,998
---
Shareholders' Funds 13,243 13,246
---
Long term borrowings 6 0
---
Short term borrowings 3 0
---
Other current liabilities 3,192 3,536
---
Other non-current
liabilities 423 1,142
---
Minority Interest 69 74
---
Total Liabilities 16,936 17,998
---
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 the last fifty 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 Agile 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 436,000 of the world's best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019, 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.
To stay up-to-date on TCS global news, follow @TCS_News.
For more information please contact:
Media: +91 22 6778 9999 Investor Relations: +91 22 6778 9999
---
arushie.sinha@tcs.com
Kedar.shirali@tcs.com
---
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