Tata Consultancy Services (TCS) - the largest information technology (IT) services provider in India and the second-largest globally - recently set an ambitious goal of $50 billion in revenue by 2030. The growth required to reach this goal, however, is lower than the company's own standards. In the past decade, TCS revenues, or net sales in US dollar terms, have grown at a compound annual growth rate (CAGR) of 9.5 per cent, from $10.2 in 2011-12, to an expected $25.3 billion during 2021-22 (FY22), based on its revenue trend in the first nine months of FY22.
5,565 contracts, valued at $201 billion are up for rebids across geographies and verticals by 2018.
The 21st AGM of the company is scheduled to be held in Mumbai on Friday.
Employee costs for Indian IT services players have touched an all-time high as salaries soar in their effort to retain talent. Engineer salaries are going through the roof. According to a news report, Infosys, which reported a 27.7 per cent attrition rate for the fourth quarter of FY22, plans to have an average salary hike of 12-13 per cent. High potential employees will get increases of 22-23 per cent.
Infosys needs to be more innovative and disruptive with its product and services, keeping its focus on growth.
The domestic benchmark indices - the S&P BSE Sensex and the National Stock Exchange Nifty50 - had lost close to 1.5 per cent in three days recently before gaining slightly. Notwithstanding weakness and volatility, the Nifty50 has managed to hold on to the 18,000 mark, while the Sensex has managed to stay above the 61,000 level. The performance of the stocks that comprise these front-line indices remains polarised.
Will Infosys, which will announce its Q2 results on Tuesday, be able to break away from the single-digit growth rates the IT services sector has been seeing?
Evaluation gets tougher as companies battle uncertain macro conditions and automation.
HDFC Bank, Reliance Industries and Housing Development Finance Corporation (HDFC) -- with free-float market cap of over Rs 3 trillion -- have the highest weight in the Sensex and the Nifty.
It said the decision was a result of the United States government's 'pro-growth economic agenda'.
Quarterly revenue from Europe rose 35 per cent, the strongest growth since the company started breaking out revenue by region two years ago.
Morgan Stanley's Asia and Global Emerging Markets Strategy Report downgraded software firms on valuation and earnings concerns.
Stronger rupee likely to take a toll; Infosys results on April 13 to be keenly watched
Top Indian IT firms, such as TCS, Infosys, and Wipro, have signalled taking aggressive cost take-out measures, including reduction in sub-contracting costs, travel expenses, freeze in salary hikes, and holding back variable payments, among others.
ITC was the biggest gainer in the Sensex pack, rising nearly 3 per cent, followed by Kotak Mahindra Bank, ICICI Bank, Maruti, Bharti Airtel, State Bank of India, Sun Pharmaceutical Industries, Axis Bank, Reliance Industries, Hindustan Unilever and JSW Steel. On the other hand, Infosys, UltraTech Cement, HCL Technologies, Bajaj Finserv, Larsen & Toubro, Titan, Tata Consultancy Services and Wipro were the laggards.
IT stocks have dropped about 3 per cent in the days since the Donald Trump administration took first steps toward visa reform and all of India's highest-profile technology tycoons have seen their net worth eroded. Saritha Rai reports.
'His working style differs from his father as he is a quick decision-maker.'
TCS said FY15 will be a better year in terms of top line growth and the deal pipeline remains strong
India's roughly $150 billion outsourcing sector generates about three quarters of its revenue from the United States.
W12 Studios will be part of TCS Interactive, further strengthening the already impressive array of creative and experience services it offers
AI, cloud computing, data analytics are a few areas companies are looking for proficiency in
Revenues, profit margins will be hit in the next one year, but more demand in the longer run.
India's top IT companies have shown a hiatus between their performance on the bourses in the pandemic period and earnings growth. The combined market cap of the top five IT companies - Tata Consultancy Services, Infosys, Wipro, HCL Technologies, and Tech Mahindra - is up 87 per cent since the end of March 2020. In comparison, the benchmark BSE Sensex is up 68 per cent during the period. So the industry beat the broader market by a big margin in the last one year.
Ex-employee Steven Heldt had sued the company for favouring South Asians and discriminating against American workforce.
While Wipro leads the pack on absolute numbers, analysts for Infosys for reporting consistent growth, revising FY22 guidance and beating TCS on revenue growth.
The board expansion comes against the backdrop of an ongoing tussle between the founders and the management over contentious issues such as CEO salary hike, severance package to former employees and corporate governance standards.
The appraisals being done by most companies this year are harsher than past ones with higher threshold in many metrics. Reduction in headcount has been done across most tier-I and tier-II IT firms along with global technology firms in the country.
In dollar terms, TCS' market valuation rose to $84 billion.
Sikka ranks 35th in the list.
The funds raised by employees were matched by an equal contribution from Wipro.
There was an uptick in clients' spends in the digital segment.
This measure will ensure that the price of a scrip cannot move upward or downward beyond a limit set for the day.
In the mid-tier space, clients with weak balance sheets are likely to ask for price revision apart from delay in payment.
The US is the biggest market for the outsourcing industry.
While TCS will see demand in the US and Europe, its local business is likely to be hit on poor IT spending.
This challenge has been made a little more daunting with the addition of two new uncertainties.
Currently, Deloitte, EY and KPMG with their associates work as statutory auditors of most of the top league domestic IT services firms. Owing to many alleged auditing lapses, the regulators have either imposed restrictions on the audit firms or are seeking to do so.
TCS created wealth worth Rs 3,458 billion for the period 2010-15.
TCS has done better than Infosys in sequential and yearly revenue growth so far this financial year.
The buyback, if successful, will surpass RIL's 2012 share repurchase of Rs 10,400 cr
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