Broad-based growth, execution discipline drive strong performance

PRESS RELEASE

 

Broad-based growth, execution discipline drive strong performance

Revenue at $4,362 million up 3.7% Q-o-Q; 8.1% Y-o-Y

    • Volume growth at 3.4%
    • Net Income at $940 million up 4.7% Y-o-Y
    • Attrition rate falls for 3rd consecutive Quarter to 13.6% LTM (incl. BPS)
    • Digital revenues at 15.9% in Q1 driven by demand for business agility 

MUMBAI, July 14, 2016: Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading IT services, consulting and business solutions firm reported its consolidated financial results according to IFRS in dollar terms for the quarter ended June 30, 2016.

Business Highlights for Quarter Ended June 30, 2016

  • Total employees: 362,079; Gross addition: 17,792 employees
  • Six clients added in $20M+ band; Four clients added in $50M+ band

Commenting on the Q1 performance, N Chandrasekaran, CEO and MD, TCS, said, “Strong execution and accelerating customer adoption of Cloud, Big Data & Analytics has driven broad-based growth across key markets and industries. Our investments in platforms are gaining significant traction as customers look to boost business agility and enhance their time-to-market advantage to gain a competitive edge.”

Chandrasekaran added, “Our rising employee retention rates for three consecutive quarters reflects our focus on engagement and investments we have made to build strong digital talent base. This is paying off with over 165,000 TCSers now trained with significant expertise in new Digital technologies that are rooted in specific domains.”

Rajesh Gopinathan, Chief Financial Officer, TCS, said, “This has been a quarter of good financial performance balancing revenue growth, profitability and cash generation. Our disciplined approach to operations have helped us counter strong headwinds in the form of annual salary hikes and promotions as well as global currency and market volatility through the quarter. We continue to invest in people, platforms and products as we look to strengthen our competitive position across key markets.”

During Q1, TCS posted the incremental revenues of $155 million – the highest in last seven quarters upto Q1 - driven by strong growth across core markets in North America, UK and Europe. India was the highlight among growth markets.

Adoption of Cloud, Big Data & Analytics is driving demand in Manufacturing, Energy & Utilities and Communications while front-office transformations are helping growth in Telecom and Media sectors. Consumer businesses like Retail, TTH and Life Sciences are also increasingly using analytics to create rich experiences for each customer and reimagine each unique customer’s journey.

Select Key Wins in Q1

  • Selected as a strategic partner by a leading process manufacturing company in North America to bring agility to its IT environment leveraging ignioTM, TCS’ neural automation platform
  • Partnering with a leading European semiconductor equipment manufacturer to enhance supplier experience as well as optimize development and support services
  • Chosen by a leading UK-based bank to increase organizational responsiveness to risk, time-to-compliance and significantly improve employee experience by transforming key functions
  • Chosen by global medical standards body to help reimagine learning and collaboration for doctors worldwide by deploying TCS iON Digital Learning Platform through the medical career cycle
  • Chosen by a leading Asian airline to bring agility and hyper-connectivity by operating on the Cloud
  • Selected by a leading North American Luxury Retailer as the strategic partner to deliver rich customer experience across channels as well as drive automation and predictability using ignio™
  • Partnering with a North American multi-brand retailer to rapidly expand its global footprint and drive synergies by simplifying the client’s IT landscape and create a platform to enable future business growth
  • Chosen by a leading North American biopharmaceutical firm as a partner to help improve throughput of their new molecule pipeline and improve regulatory compliance
  • TCS BaNCS™ clearing platform chosen by a leading Latin American financial institution to launch clearing and settlement services in one of the biggest markets in the region

Key Wins in Digital Services and Solutions in Q1

  • Chosen by a leading global financial services firm to provide its customers with superior onboarding experience across its various products
  • Engaged by a leading Asian Insurance company for real-time analytics on enterprise performance data using TCS dreamUP™
  • Engaged by a major North American telecommunications provider to re-architect their IoT platform using API and Big Data technologies
  • Chosen by a North American healthcare provider to enhance agility through DevOps methodology using Cloud technologies
  • Chosen as a strategic partner by a leading maker of energy equipment to significantly optimize chiller systems using an IoT platform and TCS Sensor Data Analytics framework
  • Engaged by a North American biopharmaceutical company to provide real time performance analytics using Big Data technologies
  • Chosen by a UK based supermarket chain to create the Cloud-based roadmap, operating model and architecture using DevOps
  • Chosen by a North American Healthcare Service provider for a consulting engagement to provide cloud readiness assessment using TCS proprietary methodology and migrate their consumer data onto Cloud 
  • Selected by a Latin American private bank to provide its customers with superior unified experience across multiple channels

Innovation and Intellectual Property

As of June 30, 2016, the company has applied for 2,928 patents, including 67 applied during the quarter. Till date the company has been granted 385 patents. 

Human Resources

The total employee strength at the end of Q1 was 362,079 on consolidated basis with gross addition of 17,792 (net addition: 8,236 employees). The total attrition rate (LTM) fell to 13.6% including BPS. The percentage of women in TCS rose to an all-time high of 33.8% while the number of nationalities increased to 131.

“We are delighted that for the third quarter in a row, our attrition rates have fallen underscoring our ability to engage with employees and provide long-term careers. We remain focused on building a team of global professionals with diversity and multiple skill-sets and helping TCSers secure additional skills in new technologies. The process of on-boarding this year’s campus trainees has also begun,” said Ajoy MukherjeeExecutive Vice President and Global Head, Human Resources.

Awards and Recognition

Business Leadership

  • North American Employee Engagement Awards 2016: Employee Engagement Project of the Year; Social Responsibility Project of the Year
  • Etihad Airlines: Best Services by IT Supplier
  • Lumity 2016 Leadership Award: For sustained commitment to engaging skills-based volunteers to inspire students in STEM education, technology resources and social investments
  • 50 Most Engaged Workplaces in North America: Achievers Award 4th consecutive Year for benchmarked employee engagement, global internal social networking hub and extensive CSR initiative
  • Three Most Admired Knowledge Enterprise (MAKE) Awards
  • BM Munjal Awards 2016: Business Excellence through Learning & Development
  • ATD Excellence in Practice Award: Categories: Managing the Learning Function; Organizational Learning and Development
  • Data News Award for Excellence (Belgium): Outsourcing Services Award for Excellence 

Partner

  • NXP: Best Supplier award
  • EMC: EMEA Alliances Growth Partner of the Year
  • Run SAP®: Partner of the Year - Pinnacle Award
  • Juniper: Emerging Alliance Partner of the Year 2016

                   Unaudited Condensed Consolidated Statements of Comprehensive Income
              For the three-month periods ended June 30, 2015, March 31, 2016 and June 30, 2016
                                           (In millions of USD, except per share data)

 

 

Three-month period ended June 30, 2015

Three-month period ended March 31, 2016

Three-month period ended June 30, 2016

 Revenue

4,036

4,207

4,362

 Cost of revenue

2,275

2,375

2,501

 Gross margin

1,761

1,832

1,861

 SG & A expenses

700

736

768

 Operating income

1,061

1,096

1,093

 Other income (expense), net

122

134

143

 Income before income taxes

1,183

1,230

1,236

 Income taxes

275

291

296

 Income after income taxes

908

939

940

 Minority interest

10

1

0

 Net income

898

938

940

 Earnings per share in USD

0.46

0.48

0.48


Unaudited Condensed Consolidated Statements of Financial Position
As of March 31, 2016 and June 30, 2016
(In millions of USD)

 

As of March 31, 2016

As of June 30, 2016

Assets

 Property and equipment

1,780

1,757

 Intangible assets and Goodwill

595

582

 Accounts Receivable

3,634

3,664

 Unbilled Revenues

603

649

 Investments

3,445

3,639

 Cash and Cash equivalents

950

421

 Other current assets

963

1,427

 Other non current assets

1,799

1,453

 Total Assets

13,769

13,592

Liabilities and Shareholders' Equity

 Shareholders' Funds

11,048

10,853

 Long term borrowings

12

9

 Short term borrowings

25

7

 Other current liabilities

2,325

2,364

 Other non-current liabilities

305

308

 Minority Interest

54

51

 Total Liabilities

13,769

13,592

 

About Tata Consultancy Services Ltd. (TCS)
Tata Consultancy Services is an IT servicesconsulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT,  BPSinfrastructure,  engineering  and  assurance services. This is delivered through its unique Global Network Delivery Model™, recognized as the benchmark of excellence in software development. A part of the Tata group, India’s largest industrial conglomerate, TCS has over 362,000 of the world’s best-trained consultants in 45 countries. The company generated consolidated revenues of US $16.5 billion for year ended March 31, 2016 and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at www.tcs.com.

Follow TCS on Twitter at @TCS_News.

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