TCS Starts FY2025 on a Strong Note with Broad-Based Growth (2024)

Highlights

• Revenue at US$7.51 billion; Growth of +3.9% YoY, +4.4% in CC
• All Major Markets Return to Sequential Growth; Very Strong Double-digit growth in Emerging Markets, led by India (+61.8% YoY)
• Almost all Verticals Return to Sequential Growth; YoY Growth led by Manufacturing (+9.4%), Energy, Resources & Utilities (+5.7%), and Life Sciences & Healthcare (+4.0%)
• Operating Margin at 24.7%; Net Margin at 19.2%
• Net Headcount addition of 5,452; LTM Attrition further down to 12.1%

MUMBAI, July 11, 2024: Tata Consultancy Services (BSE: 532540, NSE: TCS) reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending June 30, 2024.

Highlights of the Quarter Ended June 30, 2024

• Revenue at US$7.51 billion, +3.9% YoY, +4.4% YoY in Constant Currency
• Operating Margin at 24.7%; an expansion of 1.5% YoY
• Net Income at US$1.44 billion, +8.7% YoY | Net Margin at 19.2%
• Net Cash from Operations at US$1.34 billion i.e. 92.8% of Net Income
• Workforce strength: 606,998 | Net Headcount addition of 5,452
• Diverse and inclusive workplace: Women in the workforce: 35.5% | 151 Nationalities
• LTM IT Services attrition rate at 12.1%
• Dividend per share: ₹10.00 | Record date 20/07/2024 | Payment date 05/08/2024

K Krithivasan, Chief Executive Officer and Managing Director, said: “I am pleased to report a strong start to the new fiscal year with all-round growth across industries and markets. We are continuing to expand our client relationships, create new capabilities in emerging technologies and invest in innovation, including a new AI-focused TCS PacePort™ in France, IoT lab in the US and expanding our delivery centers in Latin America, Canada and Europe.”

Samir Seksaria, Chief Financial Officer, said: “In spite of the usual impact of the annual wage increments in this quarter, we have delivered strong operating margin performance, validating our efforts towards operational excellence. We remain focused on making the right investments in R&I and talent, strengthening our superior return ratios and creating long term value for our stakeholders.”

Milind Lakkad, Chief HR Officer, said: “I am delighted to announce the successful completion of our annual increment process. Our continued focus on employee engagement and development led to industry-leading retention and strong business performance, with the net headcount addition being a matter of immense satisfaction.”

Q1 FY25 Segment Highlights

Growth by Domain

Growth by Markets

Services:Clients prioritized initiatives that are making their products and services smarter, uplifting productivity while transcending the next Gen technology levers like GenAI, IoT and others.

Win themes across key deals involved operating model transformation, vendor consolidation, legacy modernization, M&A, customer experience, digital workplace services, ER&D, Identity & access management and AI/GenAI initiatives.

AI.Cloud, Cyber Security and Enterprise Solutions led the growth this quarter.

We launched new labs, Centers of Excellence and Delivery Centers focused on AI, IoT (Internet of Things) and Digital Engineering. We have also further expanded our partnership and alliances ecosystem by onboarding new partners in the areas of E&RD (utilities, Process industry and Consumer Products industry segments), Cyber Security (cloud workload and endpoint security, threat intelligence, and cyberattack response services), AI/Gen AI, e-commerce platforms, business consulting for Public Sector and Enterprise Integration Services. We continue to see significant global recognition across all our service offerings.

• AI.Cloud: We continued to have strong growth momentum with clients continuing to prioritize AI infused Cloud adoption journeys. In this quarter, over 270 AI/GenAI engagements have been deployed or are in various stages of progress. Engagements that have successfully gone live include those enabling dynamic pricing strategies, improved product quality, transformed customer experience and significant productivity uplift in business operations, software development & IT Operations amongst others. We launched the TCS AI WisdomNext™, a platform that aggregates multiple GenAI services into a single interface and enables organizations to rapidly adopt next-gen technologies at scale, efficiently and within regulatory frameworks. We are now a launch partner for the Google Cloud Generative AI Services Specialization. We also won multiple awards from Google and Microsoft at their flagship events.
• Cyber Security: Cyber Security Services continued to see strong growth this quarter. Our clients prioritized Network security, Identity and Access Management modernization, Risk & Compliance and Cloud Security. We are also seeing good traction for Security Operations transformation, Ransomware resiliency, Secure Gen AI and Attack Surface Management across geographies. This quarter we also expanded our offerings and partnerships significantly.
  
• Enterprise Solutions: Clients continue to invest in their digital core ERP modernization. They are partnering with TCS in their business and CX transformation journey for solutions in supply chain optimization, claim modernization, sustainability and reimagining sales & service channels. GenAI is an area of interest across industries. Our transformation approach, along with our contextual knowledge and industry pre-configured solutions including TCS Crystallus™ are enabling customers to accelerate their growth and transformation journeys. We will continue to invest and strengthen our joint go-to-market approach with our partners.
  
• IoT & Digital Engineering: Clients are focusing on IoT-led digital transformation and ER&D. The growth continues to be driven by demand for digital transformation across connected plants, connected services and industrial product engineering. Key services leading the growth included Manufacturing Execution Systems (MES), Smart Manufacturing, Connected Platform Services (IoT), Electric Vehicles & Software Defined Vehicles, Sustainability including Energy Management. IoT driven transformation across connected devices and manufacturing is seeing higher adoption, along with Industrial AI.
  
• Cognitive Business Operations: This quarter we saw strong bookings led by large deals, reflecting a robust demand for our Business Process and Infrastructure services. The key demand themes were M&A, operating model transformation, digitization of business processes and vendor consolidation. TCS saw significant deal wins in digital workplace services, automation, network transformation, Shrink Analytics and CX transformation. Our approach led by modern tech-led transformation & assets such as ignio™, Cognix™ & MFDM™ is gaining good traction.
  
• TCS Interactive: Our interactive services saw good growth this quarter across multiple offerings. This quarter marked significant recognition of our capabilities across various channels. AdAge ranked TCS among the world’s 30 largest agencies (#13), and we are now ranked among the top 4 Digital Agencies. We showcased our capabilities at POSSIBLE and launched the first ever CMO-CIO collaboration study in partnership with IRG at Cannes Lions.

Key Highlights

• Expanded partnership with Xerox to develop a new agile, cloud-first operating model in an end-to-end transformation program designed to fast track the evolution of the company to a simplified, services-led, software-enabled organization. TCS will consolidate Xerox’s technology services to improve business outcomes, migrate complex legacy data centers to the Azure public cloud, deploy a cloud-based Digital ERP platform to transform business processes and incorporate GenAI into operations to help drive sustainable growth
• Collaborated with IIT-Bombay to develop India’s first Quantum Diamond Microchip Imager. This advanced sensing tool will hold the potential to unlock new levels of precision in the examination of semiconductor chips, reduce chip failures and improve the energy efficiency of electronic devices. The project is aligned with the Government of India’s National Quantum Mission – an initiative to position the nation as a global quantum technology leader.
• Launched the Bringing Life to Things^TMLab in Cincinnati, Ohio, to support the rapid prototyping, experimentation, and large-scale implementation of AI, GenAI, and IoT engineering solutions, assisting clients in bringing innovative solutions to life faster and more efficiently. This lab will advance the deployment of comprehensive suite of IoT solutions, including TCS Clever Energy^TM, TCS Digital Manufacturing Platform^TM(DMP) and Digifleet^TM, among others.
• Selected by a leading American provider of higher educational services and products for Infrastructure Managed Services. TCS will transform their current operating model with a Machine First™ approach and automation capabilities and platforms leveraging Cloud Exponence™ and Cognix™, coupled with strong contextual knowledge to establish NextGen IT operations with continued focus on service improvements and advanced automation. This will enable value maximization and agility, improve user experience, and drive operational excellence.
• Selected by Burgan Bank, a leading commercial bank in Kuwait, to redefine customer experience and create a modern core banking solution that strengthens its position as a pioneer of progressive banking in the region. The bank will deployTCS BaNCSTMto consolidate multiple standalone legacy applications into a contemporary universal banking solution that drives innovation and strengthens customer relationships. The solution will come pre-integrated with TCS BaNCS’ digital and core banking, payments and wealth management, and partner solutions for CRM, finance and risk reporting, including compliance.
• Set up a Global Artificial Intelligence (AI) Center of Excellence in Paris, which will focus on the brain-machine interface, developing empathy in machines and unleashing the creativity of AI.The center will leverage TCS’ global ecosystem of startups, academia, and research organizations to bring the best of global capabilities to French companies. The impact areas shall include some of the key priorities listed in France’s National Strategy for AI, as part of the France 2030 plan.
• Chosen as a strategic partner by a leading American home improvement retailer, to establish a Next-Gen technology and data architecture landscape to transform to an AI ready enterprise. TCS will leverage its contextual knowledge, thought leadership, technology capabilities and a cloud first approach to enable the complex transformation of customer experiences, interconnected retail, stores modernization, merchandizing & supply chain, finance and data & insights. This will create a clear differentiation against their competitors, drive efficiency and improve resilience.

Customer Speak

“This digital transformation initiative is an important enabler for reinventing our operating model to simplify our geographical, offering, and operational footprint while transforming our clients’ experience. We believe TCS is the right partner to deliver such a complex program given their proven experience both within Xerox and across the industry.”

Tino Lancellotti, Chief Information Officer, Xerox

“We have embarked on a very broad technology and digital transformation journey that will create an integrated banking ecosystem; one that not only meets the current market expectations but also exceeds them. Modernizing our core systems will support our ongoing focus on innovation and delivering value to our customers through defining personalized offerings and intuitive, streamlined experiences. This will pave the way for sustainable growth. We have selected TCS BaNCS, which is widely used by banks in the region, to create a complete solution that will address our twin objectives of leading innovation and delivering excellent customer experience.”

Tony Daher, Group Chief Executive Officer, Burgan Bank

“PostNord and TCS share a strong partnership that spans many years. TCS's ability to combine research and modern technology to create innovation is something I value highly in our collaboration. The fact that some of our joint innovations and ground-breaking projects have received attention and won innovation awards is further proof of this.”

Christian Oestergaard, Lead Visionary, PostNord

“Banking made simple leading to seamless customer experience is our priority at ING. Therefore, we embarked on a journey to modernize our technology landscape, provide users with enhanced digital experiences, and partnered with TCS to future-proof and simplify our technologies and business applications. This modernization initiative enables us to minimize operational and licensing costs, simplify technology stack and lower our carbon footprint.”

Bahadir Samli, CIO, ING Belgium

Research and Innovation

As on June 30, 2024, the company has applied for 8,194 patents, including 154 applied during the quarter, and has been granted 4,146 patents including 227 granted during the quarter.

Human Resources

TCS’ workforce stood at 606,998 as on June 30^th. The employee base is very diverse, with 35.5% women and with 151 nationalities.

TCSers have clocked 11 million learning hours and acquired 1.2 million competencies. IT services’ attrition was at 12.1% for the last twelve months.

Awards and Recognition

• Named among Top 50 brands in Kantar BrandZ Most Valuable Global Brands report, showcasing a brand value growth of 7% in the past year, touching $44.79 B.
• Ranked #1 in Top Companies to Work for in India 2024 by LinkedIn; Featured in LinkedIn Top Companies to Work for List in UK and Switzerland.
• Named as one of the 100 Best Companies to Work for in Spain in 2024 by Forbes Spain, for the second consecutive year.
• Recognized as one of the 50 Most Community-Minded Companies in the United States.
• TCS North America won the Golden Bridge Awards 2024 in two categories—Gold in Outstanding Employee Engagement Strategy and Silver in Diversity achievement and capability enhancement through mindset shifts.
• TCS CodeVita won the Business World Merit Award 2024 from Business World under the Persistent Long Running Campaign category.
• Won the Global System Integrator Award at the FICO Partner Awards 2024 for deep domain expertise.
• Won the “BPO Service Provider of the Year Award” at Shared Services and Outsourcing Networking SSON's 24th Annual European Impact Awards in Lisbon, Portugal.
• Ranked #6 in North America’s Top 100 Inspiring Workplaces by The Inspiring Workplaces Group Ltd for TCS’ ‘people-first’ approach.
• Ranked #2 in CRN Magazine’s Annual Solution Provider 500 List in North America.
• Awarded the Social Impact Partner of the Year Award by Automation Anywhere for exemplified brilliance and responsibility towards customer success.
• Won Gold in Most Committed to ESG and Most Committed to DEI categories at the Finance Asia’s Best Companies Poll 2024.
• Awarded Platinum in Best Country Excellence – Thailand and Philippines at the 16th Annual Global CSR & ESG Summit and Awards by TPGI.
• Won the Energy Efficiency Initiative Award at the Business & Finance ESG Awards by Climeaction in Ireland, for delivering energy-efficient excellence at the TCS Global Delivery Centre in Letterkenny.
• Ranked #1 in the DCH Annual Ranking for companies committed to promoting young talent in Latin America.
• Recognized with three 2024 Google Cloud Partner of the Year Awards, one each in Global Expansion, Data Management and Talent Development for APAC.
• Awarded the Global System Integrator (GSI) Microsoft Partner of the Year Award in Denmark and Canada.
• TCS Ultimatix DevOps Center of Excellence (CoE) won the DASA DevOps Awards 2024 in the Best Transformation Team category.
• Awarded the Regional Winner for APAC at the IBM AI for Business 2024 Partner Awards for scaling and accelerating the impact of AI through applications, automating workflows, and driving business value.

Industry Analyst Assessments

TCS was ranked a Leader in 42 competitive assessments published by leading research firms in Q1FY25. In 2 of these, marked with * in the table below, TCS was positioned the foremost leader or ranked #1.

IFRS Financial Statements

Consolidated Statements of Comprehensive Income

For the three-month periods ended June 30, 2023, and June 30, 2024

(In millions of $, except per share data)

Consolidated Statements of Financial Position

As of March 31, 2024, and June 30, 2024

(In millions of $)