TATA CONSULTANCY SERVICES: Billion-dollar Giant

CEO S. Ramadorai Startup-Year 1968 Products & Services IT Consultancy and Software Services Employees 23,854 Branches 107 Address Air India Building, 11th Floor, Nariman Point, Mumbai - 400 021 Tel 56689999 Fax 56689999 Website www.tcs.com

S. Ramadorai CEO S. MAhalingam Chief Financial Officer S Padmanabhan Corporate V-P (OD) Phiroz Vandrewala Executive V-P

As with other top players, TCS faced severe bottomline pressure. Near-shore delivery centers will help fight this Two new overseas delivery centers set up in China and Japan–taking the total up to 9 Much-awaited IPO expected any time now

Sheer size and decades of standing makes it an easy choice as vendor for longer-term, larger projects–especially in the US market With CMC under its wings, it has a strong presence in the domestic marketplace

Presence in the BPO space is not strong enough, despite a strong JV with HDFC and AFS Onsite share of revenues a high 65%, and needs to be brought down closer to industry average of 40%

Leadership involves finding a parade and getting in front of it," said

John Naisbitt, the 20th century American futurist...

You can do that. Or you can create the parade. TCS created it, and walked in

front. From its 1968 beginnings, to last year, where it crossed $1 billion in

revenues–the first Indian technology company to do so.

In 2002-03, TCS grew nearly 20% to Rs 4,915 crore. But the story behind this

number was one of hardship.

Growth slowed down–15 percentage points below last year’s number.

Clearly, this was beyond the effect of an increasing base, suggesting a

significant impact of the inclement global IT services market on the company.

For one, 2002-03 was bereft of major announcements of project wins, compared to

the year before when TCS delighted the industry with its salvo of multi-million

dollar deals. TCS did sign new deals, with customers like AT&T Wireless,

Toyota Financial Services, Societé Generale and others, but the excitement and

celebration were missing. In terms of pure growth, the domestic market offered

better promise–TCS grew by nearly half in the domestic market, whereas exports

grew by less than a fifth. Domestic revenues stood at Rs 369 crore, fattened by

revenue realization from the SBI order for core-banking and trade finance.

In all, 2002-03 was the toughest yet for TCS–with massive pressures on

billing rates, client acquisition, productivity and profitability. With nearly

65% of the revenues coming from onsite projects (industry average was 40%),

these pressures will only exacerbate. Herein, the presence of nine near-shore

delivery centers will help, the ones in China and Japan having been set up this

year.

TCS’ goal of making it big in high-value areas like consulting remains

distant–nearly 81% of its revenues came in from application development and

maintenance in traditional and e-business solutions.

And TCS has not yet fully played out its BPO foray. Intelenet, its joint

venture with HDFC and AFS, the Swissair BPO subsidiary it bought out in 2002-03,

does not provide it ample footprint in this market. In the coming year, TCS may

take some significant steps in this direction. And the much-awaited IPO, when it

happens, assures all glory for the year.