Business

TCS net drops as momentum reverses

Firm to honour campus offers; rules out retrenchments as also increments; promotions on track

India’s largest information technology services exporter Tata Consultancy Services (TCS) reported a marginal dip in its fourth quarter net profit to ₹8,093 crore compared with ₹8,152 crore in the year-earlier period as the COVID-19 pandemic completely reversed the positive momentum that the company had started seeing in some of its biggest verticals in the first half of the quarter.

The fall in profit came on a 5.09% growth in revenue to ₹39,946 crore in the quarter.

Rajesh Gopinathan, CEO and MD, said, “We had very strong deal closures during the quarter. In fact, our order book this quarter is the largest ever, from the time we started reporting the metric. Organisations across the world are realising the need for operational and systems resilience. Many of the large deals we signed during the quarter address precisely that need. They are core transformation programmes that leverage the power of technology to make our customers’ operations leaner, faster and more resilient.”

The IT major will honour all commitments with respect to campus hiring, without any layoffs and will also offer promotions.

However, the company will not offer increments to its 4.4 lakh employees this year. “All offers made will be honoured; we don’t see any form of retrenchment. Our talent model is proven and we are proud of our 4.4 lakh employees,” he said.

TCS hired 24,179 employees on a net basis in FY20, taking the total headcount to 4,48,464 as of March 31, 2020. The workforce comprises 144 nationalities with women making up 36.2% of the workforce.

“We have made 40,000 campus offers this year and we will honour all the offers made. We will start onboarding from June. Promotions this year will continue; however, there will be no increments at this point of time,” said Milind Lakkad, Global Head, Human Resources.

Revenue growth was led by life Sciences & Healthcare (+16.2%), Communications & Media (+9.3%) and Manufacturing (+7%). Companies revenue from the BSFI segment fell 1.3%.

N. Ganapathy Subramaniam, COO and ED, said: “COVID-19 has presented us with an operational challenge of scale, speed and complexity. Switching from a long-established infrastructure model of an organisation of over 4,48,000 employees in a matter of days is pushing the boundaries of location independence as well as agility to their limits. “The outcome was our secure, border-less workspaces framework, which has now enabled close to 90% of our employees to work remotely and securely.”

India growth down

Geographically, growth was led by Europe (11.9%) and U.K. (5.4%), Latin America rose 3.9%, Asia Pacific grew 3.5% and MEA, 1.3%. North America inched up 0.2% while growth from India declined 1.9%.

Paras Bothra, president, equities, Ashika Stock Broking, told The Hindu, “TCS’ Q4FY20 results were a tad below estimates both at the topline and bottomline, however keeping the margins in tact. . Also, the management stated that the positive momentum they were witnessing in their largest verticals reversed because of the pandemic. On the positive side, TCS had strong deal closures during the quarter.”

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Printable version | Jul 11, 2020 4:39:19 AM | https://www.thehindu.com/business/tcs-net-drops-as-momentum-reverses/article31359418.ece

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