About the company:
Tata Consultancy Services (TCS) is a leading global IT services, consulting, and business solutions company headquartered in Mumbai, India. A subsidiary of the Tata Group, TCS operates in over 50 countries and provides services in digital transformation, cloud computing, artificial intelligence, cybersecurity, and enterprise solutions. With a strong focus on innovation and customer-centric solutions, TCS serves diverse industries, including BFSI, retail, healthcare, manufacturing, and telecom. It is known for its robust talent pool, large deal wins, and industry-leading profitability, making it one of the top IT service providers globally.
Deal Wins & Business Growth:
Total Contract Value (TCV): $10.2 billion, with $5.9 billion from North America and $3.2 billion from BFSI.
Large deal wins across industries despite no mega deals.
BFSI: Grew 0.9%, with strong AI and digital transformation adoption.
Consumer Business: Grew 1.1%, led by retail sector recovery.
Manufacturing: Grew 0.4%, expected to rebound in Q4.
Technology & Services: Declined 0.4%, but cloud and AI demand increasing.
Life Sciences & Healthcare: Declined 4.3%, awaiting policy clarity in the U.S.
Communications & Media: Declined 10.6%, but early signs of IT spending rebound.
Geographical Performance:
India: 70.2% YoY growth, largely due to BSNL project.
Middle East: 15% growth, Latin America: 7% growth.
North America & Europe: Declined 2.3% and 1.5% respectively.
UK: Grew 4.1%, APAC: Grew 5.8%.
Strategic Highlights & Technology Focus:
AI & GenAI: Increased adoption in drug discovery, fraud detection, and automation.
TCS BaNCS™: 4 wins and 7 go-lives, including Zions Bancorporation’s core banking modernization.
ignio™ (AI automation): 30 new deals, 9 go-lives.
TCS iON™ (Digital Exams): 38 new wins, conducted exams for 17 million candidates.
TCS BFSI Platforms: Won a 15-year contract in Ireland for automatic pension enrollment.
TCS Quartz™: Blockchain solutions expansion in Europe.
Key Outlook & Challenges:
Discretionary Spending Recovery: BFSI, retail, and manufacturing seeing early signs of increased spending.
Cloud & AI Investments: AI-led modernization projects are accelerating across industries.
BSNL Project Tapering Off: 70% completed, expected to phase out by Q2 FY26.
Margins Target: Aiming to reach 26% in Q4, supported by efficiency gains and cost optimization.
Management Commentary:
CEO K Krithivasan: Confident that CY25 will be better than CY24, driven by strong TCV and demand recovery.
Expecting discretionary spending to strengthen due to macroeconomic stability, easing inflation, and U.S. policy clarity.
Here is a table summarizing TCS’s financial performance over the last three quarters (Q1 FY25, Q2 FY25, and Q3 FY25):
| Financial Metrics | Q1 FY25 | Q2 FY25 | Q3 FY25 |
|---|---|---|---|
| Revenue (₹ Crores) | 59,381 | 60,698 | 63,973 |
| Revenue ($ Million) | 7,225 | 7,300 | 7,539 |
| YoY Revenue Growth (%) | 6.7% | 7.0% | 5.6% |
| Operating Margin (%) | 23.2% | 24.1% | 24.5% |
| Net Margin (%) | 18.6% | 19.0% | 19.4% |
| Net Profit (₹ Crores) | 11,074 | 11,735 | 12,414 |
| EPS (₹ per share) | 30.4 | 32.3 | 34.2 |
| Free Cash Flow ($ Billion) | 1.23 | 1.30 | 1.45 |
| Dividend (₹ per share) | 9.0 | 10.0 | 76.0 (₹10 interim + ₹66 special) |
Recent updates:
Highlights from last con call:
Financial Performance:
Revenue: ₹63,973 crores (~$7.54 billion), 5.6% YoY growth in INR and 4.5% in constant currency.
Operating Margin: 24.5%, up 40 bps sequentially.
Net Margin: 19.4%; EPS grew 6.4% YoY.
Free Cash Flow: $1.45 billion; net cash from operations at 105.3% of net income.
Dividend: ₹76 per share (₹10 interim + ₹66 special dividend).