TCS: Coding Success
With software products driving growth, india is turning into a new frontier for TCS
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It's 52nd year of operations, Tata Consultancy Services has stood strong on its values, entrepreneurial agility, customer-centricity, and social responsibility parameters. A part of the Tata group, India’s largest multinational business group, TCS has over 4,20,000 of the world’s best-trained consultants in 50 countries. The company generated consolidated revenues of $20 billion for the year ended March 31, 2019 and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India.
Tata Consultancy Services’ 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, MSCI Global Sustainability Index and the FTSE4Good Emerging Index.
The company crossed two important milestones in FY19. Its annual revenue crossed the $20 billion figure, a 20-fold increase over the last 16 years. It also became the first Indian company to achieve a market capitalisation of $100 billion in the last decade, and join the list of the Top 100 most valuable companies in the world. It is not surprising, therefore, that TCS should once again be in the top rung of BW Businessworld’s Most Respected Companies (MRC), a perception-based ranking. In fact, compared to BW Businessworld’s last MRC Issue of 2018, where TCS had an average score of 2.79, this year it has managed to jump up the ladder cornering an average score of 3.02 led by high scores on parameters of financial returns, trustworthy leadership and work culture.
In FY19, TCS continued to see strong revenue growth in its ‘Energy and Utilities’ vertical, which grew by 20 per cent. It’s ‘Life Sciences and Healthcare’ vertical grew 15.3 per cent while the other remaining verticals ? Communications and Media, Manufacturing and Technology and Services – grew 9.6 per cent, 7.5 per cent, and 6.1 per cent respectively.
In the latter part of FY20, it initiated a restructuring plan aimed at better leveraging opportunities in the digital space. TCS had earlier categorised digital services under 800-900 offerings, and this has now been narrowed down to 500, with more reductions in the offing.
Rajesh Gopinathan, CEO, TCS says, “We had an inventory of more than 800-900 different offerings. We narrowed it down to 500 offerings. Within that also there is a very long tail where the bulk of the revenues are at one end. We’ve cut the offerings by 50 per cent, we’ll cut them a bit more.”
TCS’ business resilience and longevity comes from its ability to stay abreast with technology change, continually investing in building capabilities on newer technologies, and creatively harnessing the power of those technologies in bespoke ways for the company’s customers, says Gopinathan. “As the rate of change of technology increases, our value to them will only increase,” he says.
With software products and platforms driving growth for TCS, India is turning into a new frontier for the company. The company has said it would be launching a platform specifically for India ‘very soon’.
Launching an India-specific software platform will allow the company to accelerate growth here. Numbers suggest that the Indian market is growing much faster than North America, the company’s largest market. For example, TCS’ India revenues clocked a growth of 6.4 per cent for the December 2019 quarter, ahead of the North American revenue growth of around four per cent. And this has happened despite the challenges faced by the Indian economy in the past several quarters.
For the record, nearly six per cent of TCS’ revenues come from the India business, bringing in over a billion dollars in annual revenues. For the nine months of the current financial year, India revenues stood at Rs 6,784 crore, up nearly 10 per cent from Rs 6, 174 crore in the same period last year.