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TCS: Strong Share Gains in Europe Stand Out in Seasonally Weak Q3


MUMBAI, India, Jan. 17, 2020 /PRNewswire/ -- 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 December 31, 2019.

Tata Consultancy Services.(PRNewsFoto/Tata Consultancy Services) (PRNewsfoto/Tata Consultancy Services)

Financial Highlights for Quarter Ended December 31, 2019 

Record date 25/01/2020; Payment date 31/01/2020

Business Highlights for Quarter Ended December 31, 2019

 

Commenting on the Q3 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "We saw the sectoral trends of the first half of the year continue to play out in the third quarter. Our robust order book during the quarter reflects our ability to pitch innovative technology solutions to address the business needs of different stakeholders in the enterprise, and participate in our customers' enterprise-wide transformation initiatives. This is also helping deepen and broaden our customer relationships, and make the business more resilient."

He added: "Our participation in the growth and transformation spends of our customers is most evident in our sustained success in Continental Europe where our revenues have more than doubled in the last five years. Our thought leadership in areas like the Business 4.0tm framework, Enterprise Agility and the Machine First Delivery Model, our domain and technology consulting expertise, investments in research and innovation, and our ability to design complex solutions leveraging multiple capabilities from across TCS, have made us the preferred partner for CEO-level initiatives at progressive organizations."

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "In a seasonally weak quarter characterized by furloughs across multiple industry verticals, we focused on execution, while continuing to invest for future growth. Having onboarded over 30,000 trainees in the first half of the year, we worked on driving up utilization in Q3 and had good outcomes. Our client metrics were also very good, with additions across most revenue buckets."

He added: "Our large core transformation engagements are all progressing very well. At M&G Prudential as well as at Scottish Widows, we crossed important transformation milestones, successfully migrating hundreds of thousands of policies from legacy systems onto our platform, significantly enhancing the customer experience for those policy holders. These are industry-defining engagements, closely watched by other insurance companies. Our achievement of these key milestones adds further impetus to their own transformation plans."

V Ramakrishnan, Chief Financial Officer, said: "Our ability to expand our margins in a volatile environment speaks of the strength of our business model, strong execution focus and the higher quality revenues we are getting on account of our strong positioning in our customers' growth and transformation spends."

Q3 Segment Highlights

Industries:  Revenue growth was led by Life Sciences & Healthcare (+17.1%), Communications & Media (+9.5%) and Manufacturing (+9.2%). Other verticals ? BFSI (+5.3%), Retail & CPG (+5.1%) and Technology & Services (+3.3%) ? showed more modest growth.

Markets: Growth was led by Europe (+15.9%) and MEA (+10.8%).  and UK (+7.5%). North America and Asia Pacific grew 4.1% and 5.7% respectively. India grew 6.4% while Latin America grew +6.2%.

Services:  

Key Highlights

Research and Innovation

As on December 31, 2019, the company has applied for 5,006 patents, including 132 applied during the quarter, and has been granted 1,211 patents.

Human Resources

Following the unprecedented levels of hiring in H1 FY20, headcount addition moderated in Q3. The company continues to be the industry benchmark in talent retention, with the IT Services attrition rate (LTM) at 12.2%. Net of attrition, the headcount stood at 446,675 as of December 31, 2019.

The workforce is young and very diverse, comprising 146 nationalities and with women making up 36.2% of the workforce. TCS' investments in organic talent development continue to deliver superior outcomes. At the end of Q3, over 327,000 employees had been trained on multiple new technologies, and over 404,000 had been trained on Agile methods.

"Our standing as an innovation partner for our customers has been enabled by the incredible energy of our people, their creativity and their ability to bring together their digital expertise and their deep contextual knowledge to reimagine how business is done," said Milind LakkadGlobal Head, Human Resources. "Our culture of life-long learning, world-class learning infrastructure, a vibrant workplace and exciting work opportunities across various industries, coupled with progressive policies and systemic collaboration in the TCS ecosystem; all these enable and empower our associates to realize their potential."

Awards and Recognition

Business Leadership:

Partner:


IFRS Financial Statements

Unaudited Condensed Consolidated Statements of Comprehensive Income

For the three-month periods ended Dec 31, 2018 and Dec 31, 2019

(In millions of $, except per share data)


Three-month period
ended

 Dec 31, 2018

Three-month period
ended

 Dec 31, 2019

Revenue

5,250

5,586

Cost of revenue

3,056

3,275

Gross margin

2,194

2,311

SG & A expenses

849

913

Operating income

1,345

1,398

Other income (expense), net

161

83

Income before income taxes

1,506

1,481

Income taxes

364

340

Income after income taxes

1,142

1,141

Minority interest

2

3

Net income

1,140

1,138

Earnings per share in $

0.30

0.30


Unaudited Condensed Consolidated Statements of Financial Position

As of Mar 31, 2019 and Dec 31, 2019

(In millions of $)


As of Mar 31, 2019

As of Dec 31, 2019

ASSETS

Property and equipment

1,685

1,654

Right-of-use Assets

0

926

Intangible assets and Goodwill

581

576

Accounts Receivable

3,969

4,092

Unbilled Revenues

1,298

1,456

Investments

4,243

3,679

Cash and Cash equivalents

1,045

739

Other current assets

2,908

2,467

Other non current assets

1,207

1,106

Total Assets

16,936

16,695

LIABILITIES AND SHAREHOLDERS' EQUITY

Shareholders' Funds

13,243

11,949

Long term borrowings

6

0

Short term borrowings

3

0

Other current liabilities

3,192

3,497

Other non-current liabilities

423

1,170

Minority Interest

69

79

Total Liabilities

16,936

16,695

 

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 the last fifty 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 446,000 of the world's best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019, 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

 

SOURCE Tata Consultancy Services


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