DQ Top 20 2018: Rank #1: Tata Consultancy Services (TCS)

DQ Estimates Revenue (Rs Crore)

For the year 2016 to 2017 : 1,17,966

For the year 2017 to 2018: 1,23,104

Increase of 4%

The year 2017 -18 saw a steady acceleration on a path that TCS was already on, it refocused the organization on the market opportunity presented by four big themes: Intelligence, Agility, Automation and Cloud, and reorganized the teams to align with these themes.In FY 2018, TCS delivered a revenue of Rs 1,23,104 crore, growing 4.4% over the prior year. On a constant currency basis, barring BFSI which grew 3.2% and Retail & CPG which grew 1.5%, TCS had a very strong growth in the other six industry verticals, averaging 13.2% in aggregate. Growth was led by Energy and Utilities which grew 26.8%, Travel and Hospitality which grew 22.4%, Life Sciences & Healthcare which grew 11.9% and Communications & Media which grew 11.6%.

In terms of its markets, growth was led by Continental Europe which grew 19.1% in constant currency, UK which grew 8.6%, Latin America which grew 7.8% and India which grew 6.9%. Operating margin was 24.8%, which was flattish year on year, on a currency-adjusted basis. Net profit was Rs 25,826 crore, a net margin of 21%.

In mid FY 18, TCS articulated its Business 4.0 thought leadership framework that allows enterprises to leverage digital technologies to further their growth and transformation agendas. At the core of Business 4.0 is a shift in mind-set, from optimizing the use of scarce resources to harnessing the technology-enabled abundance of talent, compute power, storage, and market reach. FY 2018 saw many of its customers embark on the refurbishment of their core. With its contextual knowledge, domain expertise, depth in digital and intellectual property, TCS has transpired as the preferred partner in these strategic initiatives.

Over the year TCS signed several mega deals that are industry-defining in nature. Whether it was the largest Internet of Things (IoT) deal that it signed with Rolls Royce, or the deal with Transamerica to replace their fragmented, legacy core with a modern, cloud based digital platform – the largest contract signed by TCS till date – these are all examples of progressive organizations embracing digital transformation at their core.

For the full year, TCS added

  • 3 more clients in the $100 Mn+ revenue band bringing the total to 38,
  • 13 more clients in the $50 Mn+ revenue band,
  • 17 more in the $20 Mn+ band and
  • 40 more in the $10 Mn+ band.

Unlike the large deals of the past, which were large in scale, but were mostly homogeneous in terms of the services sold, the large deals it signed were very large in scope as well, leveraging the full spectrum of its capabilities. That makes it very difficult for others to replicate, and strengthens its competitive positioning. Revenue from digital engagements accounted for 21.2% of its revenue in FY 2018 and grew 35.3% year on year.

The company firmly believes that there are no legacy people, only legacy technologies. In FY 2018, over 247,000 employees were trained in digital technologies.

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