- Q3 Revenue at $6.524 billion | Growth of 14.4% YoY; +15.4% in CC
- All Industry Verticals Grow Mid- to High Teens
- North America Continues to Lead, +18% YoY CC
- Client Metrics Shine: 10 new clients in $100 Mn+ bucket (Total: 58); 21 new clients in $50 Mn+ bucket (Total: 118)
- Women in the Workforce Cross the 200,000 Mark; +68% Growth in Number of Senior Women Executives during 2016-21
- Board Announces Buyback Valued at ₹18,000 Cr at ₹4,500 per Share
MUMBAI, January 12, 2022: Tata Consultancy Services (BSE: 532540, NSE: TCS) reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending December 31, 2021.
Highlights of the Quarter Ended December 31, 2021
- Revenue at $6.524 billion, +14.4% YoY; +15.4% CC YoY
- Industry-Leading Operating Margin at 25%; -1.6% YoY
- Net Income at $1.303 billion, +10.5% YoY | Net Margin at 20%
- Strong Client Addition: 10 New $100Mn+ Clients (total: 58); 21 new $50Mn+ clients (total: 118)
- Net Cash from Operations at 111.1% of Net Income
- Net headcount addition of 28,238 |Workforce strength: 556,986
- Diverse and Inclusive: Women Employees Exceed 200,000; +68% growth in number of senior women executives during 2016-21 | 156 Nationalities in the workforce
- Building a G&T workforce: 100K+ market relevant skills gained in Q3 | 38K+ Contextual Masters identified
- LTM IT Services attrition rate at 15.3%; lowest in the industry
- Board recommends a buyback of shares to the tune of ₹18,000 Cr at ₹4,500 per share
- Dividend per share: ₹7.00 | Record date 20/01/2022 | Payment date 07/02/2022
Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “Our continued growth momentum is a validation of our collaborative, inside-out approach to our customers’ business transformation needs. Customers love our engagement model, our end-to-end capability, and our can-do approach to problem solving. While mapping out their innovation and growth journeys, we are also helping them execute new-age operating model transformations to support those journeys.”
N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “We continued our focus on growing organically and on developing the talent, methodologies, and toolkits for an ever-evolving technology landscape. This, coupled with our contextual knowledge and the passion and commitment of thousands of TCSers enabled us to deliver cutting-edge solutions during the quarter, and help our clients realize speed to value. We are also delighted to cross another important milestone in our journey, hitting the $25 billion revenue mark in CY 2021.”
Samir Seksaria, Chief Financial Officer, said: “Our sustained investment in our talent has helped us power strong growth despite a challenging supply environment. We remain focused on long term talent development as well as on tactical measures to mitigate the talent churn. We have exercised various operating levers in Q3 to mitigate the higher costs and manage our employee expense.”
Q3 Segment Highlights**
Industries: All verticals grew in the mid to high teens. Growth was led by Retail and CPG (20.4%), BFSI (+17.9%) and the Manufacturing vertical (+18.3%). Technology & Services grew +17.7%, Life Sciences and Healthcare grew +16.3% and Communications & Media grew +14.4%.
Markets: Among major markets, growth was led by North America (+18%) and Continental Europe (+17.5%) while UK grew +12.7%. Among emerging markets, growth was led by Latin America (+21.1%) and India (+15.2%), followed by Middle East & Africa (+6.9%) and Asia Pacific (+4.3%).
Services: Q3 witnessed a clear trend of enterprises investing confidently in technology initiatives for longer term growth. There was broad-based growth across all services, led by Cloud, Cyber Security, Consulting & Services Integration and IoT & Digital Engineering.
- Consulting & Services Integration: C&SI continues focus on growth & transformation initiatives for clients with proactive propositions combining TCS contextual knowledge, technology & domain expertise integrating multiple services across our practices. Cloud Strategy & Transformation, Customer Experience, Finance & Shared Services transformation led growth in the quarter.
- Cloud Platform Services: Accelerated cloud adoption by enterprises drove growth in application transformation, IT landscape modernization, shift to hybrid cloud, and data modernization on cloud. TCS won the AWS 2021 Rising Star Partner of the Year (GSI, for USA) & AWS Application Transformation and Migration Partner of the Year (for ANZ) awards.
- Digital Transformation Services: Key G&T themes which saw traction in Q3 include connected enterprise, product innovation, customer experience transformation and security services. Engineering and IoT services are enabling customers to gain complete traceability of products across the value chain, manage assets, innovate products, re-design plants and improve predictability & operational efficiency. This drove growth in Intelligent devices, GIS and Plant Solutions & Services. IoT, Engineering and Analytics services are also helping customers in their sustainability journey, a critical business priority. We are enabling clients on their digital ERP journey leveraging TCS Crystallus™ to empower enterprise digital transformation and drive business value. Oracle Cloud and Niche SaaS transformations led growth this quarter. TCS’ Cyber Defence Suite and globally distributed Threat Management Centers steered growth during the quarter with agile, localized, regulatory compliant security services across ransomware protection, cloud security and managed security services with strong market resonance.
- Cognitive Business Operations: Demand was propelled by customers seeking to outsource IT and business operations to drive business agility, operational resilience, and cost efficiency. Growth in Q3 was led by Enterprise BPS, Infrastructure transformation and automation services. MFDM™ and Cognix™ continue to demonstrate strong market relevance and deliver customer delight.
** Year on Year Growth in Constant Currency terms
Research and Innovation
As on December 31, 2021, the company has applied for 6,396 patents, including 227 applied during the quarter, and has been granted 2,201 patents.
Human Resources
TCS crossed a new milestone in its diversity journey in Q3, with the number of women in its workforce crossing 200,000. The company added 28,238 employees on a net basis, taking the total number of employees to 556,986 as on December 31, 2021. Its policy of hiring local talent across the world has resulted in a globally distributed workforce comprising 156 nationalities.
The company continued to invest in organic talent development. Over 100,000 market-relevant deep skills were gained by TCSers in Q3. 32.3% of open positions were fulfilled through up-skilling/cross-skilling. Over 38,000 Contextual Masters identified across the organization represent a large, internally groomed cadre of specialists powering the company’s expanding foray into the growth and transformation opportunity.
Sustained investment in organic talent development, progressive workplace policies and a vibrant culture that empowers individuals and fosters creativity, have resulted in a long-term track record for best-in-class talent retention. IT Services attrition rate (LTM) in Q3 was 15.3%.
“The ability to attract and retain top quality talent across the world has been central to TCS’ business success and a source of competitive differentiation. We continue to set new records in talent acquisition. In addition to the 43,000 freshers we hired in H1, we onboarded 34,000 fresh graduates in Q3 – which is higher than our full year fresher hiring numbers in prior years. On the talent retention side, we continue to be the industry benchmark. By continuing to invest in our people, giving preference to internal candidates for the most exciting open positions, providing global deployment opportunities, fast track career paths linked to learning, and promotions to over 110,000 employees, we have been able to retain our best talent and overcome supply side challenges,” said Milind Lakkad, Chief HR Officer.
Awards and Recognition
Business Leadership:
- Named a UK Superbrand for the seventh consecutive year in recognition of TCS’ exceptional business growth, its position as the top strategic IT player by revenue in the UK, its number one ranking in customer satisfaction, and its community initiatives.
- Recognized as a Superbrand in Singapore for its strong market reputation, digital initiatives and business growth.
- Awarded two Diamond awards at the 2021 ITSMA Marketing Excellence Awards in the categories – Embedding ABM Programs and Orchestrating Executive Engagement.
- Won 3 awards at the 2021 LinkedIn Talent Awards India in the categories: Best Employer Brand on LinkedIn, Best Culture of Learning, and Diversity Champion
- Won 5 awards at the Economic Times Human Capital Awards, in the categories: Excellence in Communication Strategy, Excellence in Creating a Culture of Continuous Learning and Upskilling, Excellence in Fostering Innovation and Design Thinking, Excellence in HR Digital Transformation and Excellence in Recruitment of Professionals.
- Won the World Leadership Congress Award for world-class operations at the All-Women Business Process Services and IT Center in Riyadh, Saudi Arabia.
- Won the 2021 Economic Times Best Brand of UAE award for brand reputation in the Middle East region.
Innovation and IP:
- Recognized for Best Patents Portfolio in the Large Enterprise category at the Confederation of Indian Industry Industrial Intellectual Property Awards 2021.
- Won the 2021 ASSOCHAM IP Excellence Award for pioneering efforts in facilitating innovations and creating a healthy intellectual property (IP) ecosystem.
- Awarded the Enterprise Blockchain Award 2021 by the Blockchain Research Institute.
- Won two awards at the IoT Global Awards 2021: for TCS DigiFleet™ in the Automotive, Transport and Travel category and for TCS Smart Store in the Retail, Marketing and Hospitality category.
- TCS ADD Regulatory platform won the India Pharma Awards 2021 in the category of Excellence in Ancillary Pharma Services.
- Two TCS-built solutions featured in the 2021 ISG Digital Digital Case Study Awards: TCS’ Digital Twin Platform for Saipem won the Energy and Utilities Standout Award as well as the Southern Europe regional standout award; the TCS’ digital transformation work for Shell won the ANZ regional standout award.
- Won 2 Silver Awards at the 2021 Brandon Hall Group Excellence in Technology Awards in the categories Best Advance for Leading Under a Crisis (TCS Vaccination Solution) and Best Advance in Time and Labor Management (TCS Timesheet App)
Partner:
TCS won the following awards from technology alliance partners:
- Application Transformation and Migration Partner of the Year at the AWS Partner Awards in Australia and New Zealand.
- IFS Solutions Partner of the Year and IFS Services Partner of the Year (Enterprise Category) at the 2021 IFS Partner of the Year Awards
- BMC Partner of the Year Award – Cognitive Automation at the BMC Service Provider eXchange (SPeX).
- 2021 Partner of The Year Award by Smart Message
- Strong Growth – Identity and Access Management Partner of the Year 2021 by CyberRes, a Micro Focus line of business.
- Solutions implemented by TCS for SAIL and Trent won the SAP ACE Awards 2021 in the Manufacturing Transformation and Game Changer categories respectively.
- Top Performing - GSI Partner and Game Changer - Enterprise Business category in India and South Asia at the Red Hat Partner Awards
About Tata Consultancy Services
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 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 556,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $22.2 billion in the fiscal year ended March 31, 2021 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 MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com.