TCS Demonstrates Operational Resilience While Positioning for Growth Recovery

Q1 CC Revenue Degrows 6.3% YoY
Life Sciences (+13.8% YoY) Shines Amid Widespread Declines
Industry-leading Operating Margin: 23.6%
Q1 Total Contract Value: $6.9 Bn

MUMBAI, July 9, 2020: 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, 2020.

Highlights of the Quarter Ended June 30, 2020

Revenue at $5.059 Bn, -7.8% YoY
Constant Currency revenue growth: -6.3% YoY
Net Income at $925 Mn, -20.8% YoY
Operating Margin at 23.6%; Net Margin at 18.3%
Strong Cash Conversion: Operating Cash Flow at 132.6% of Net Income
Consolidated headcount: 443,676 | Women in the workforce: 36.2%
353K+ employees trained in new technologies
Industry-leading talent retention: IT Services attrition rate at 11.1% LTM
Dividend per share: ` 5.00

Record date 17/07/2020; Payment date 31/07/2020

Commenting on the Q1 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said,“The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth.”

He added, “After an initial period of disruption, customers have now stabilized their operations and are now embarking on new beginnings to adapt and thrive in a post-pandemic world. We are seeing many customers focus on front-end transformation, resulting in significant traction for our products and services. The other big investment themes are around driving operational resilience, adaptability and optimization. We signed several large core transformation programs encompassing operations, applications, cloud and cybersecurity. Our Machine First™ approach, delivered using the Secure Borderless Workspaces™ model is helping us win such opportunities. Very encouragingly, we saw customers launch new business transformation programs or restart deferred programs during the quarter. This is indicative of business confidence returning in pockets.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said,“The location-independent way of working is gaining traction. Our customers are quite comfortable integrating the remote workforce, using new collaborative technologies to get work done. Our Secure Borderless Workspaces™ model has been institutionalized. We have been able to seamlessly adapt and extend it to prospect for new business, sell, contract and execute programs.”

He added, “The resilience and adaptability that we have shown in supporting all our customers over the last three months bodes well for our relative competitiveness going forward. Despite the continued uncertainty and weakness in all major economies, we have had very healthy deal closures and a strong pipeline. We will stay focused on helping our customers overcome the current challenges and prepare for the growth ahead.”

V Ramakrishnan, Chief Financial Officer, said, “We have taken a supportive approach to employees and vendors, and used other efficiency levers to limit the impact of the sharp revenue decline during the quarter, and still delivered an industry-leading operating margin. Disciplined execution resulted in superior cash conversion and a strong cash balance that positions us very well to weather the downturn.”

IFRS Financial Statements

Consolidated Statements of Comprehensive Income

For the three-month periods ended Jun 30, 2019 and Jun 30, 2020

(In millions of USD, except per share data)

	Three-month period ended Jun 30, 2019	Three-month period ended Jun 30, 2020
Revenue	5,485	5,059
Cost of revenue	3,265	3,065
Gross margin	2,220	1,994
SG & A expenses	895	800
Operating income	1,325	1,194
Other income (expense), net	203	60
Income before income taxes	1,528	1,254
Income taxes	357	324
Income after income taxes	1,171	930
Minority interest	3	5
Net income	1,168	925
Earnings per share in $	0.31	0.25

Consolidated Statements of Financial Position

As of Mar 31, 2020, and Jun 30, 2020

(In millions of USD)

	As of March 31, 2020	As of June 30, 2020
Assets
Property and equipment	1,583	1,575
Right-of-use Assets	1,060	1,061
Intangible assets and Goodwill	547	556
Accounts Receivable	4,057	4,024
Unbilled Revenues	1,398	1,259
Investments	3,494	3,936
Cash and Cash equivalents	1,146	1,291
Other current assets	1,976	2,369
Other non current assets	1,048	987
Total Assets	16,309	17,058

Shareholders' Funds	11,433	12,154
Other current liabilities	3,587	3,623
Other non-current liabilities	1,204	1,195
Minority Interest	85	86
Total Liabilities	16,309	17,058

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 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^TM 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 443,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $22 billion in the fiscal year ended March 31, 2020, 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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TCS is here to make a difference through technology.

We deliver excellence and create value for customers and communities.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

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Recent recognitions

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TCS works hand in hand with world-leading investors.

TCS Demonstrates Operational Resilience While Positioning for Growth Recovery

TCS is here to make a difference through technology.

We deliver excellence and create value for customers and communities.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

Upcoming events

TCS works hand in hand with world-leading investors.

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