Core Markets and Verticals grow 4.1% in CC; Overall volume grows 4.4%

Quarterly Revenue crosses $6 billion mark: Q1 Rev at $6.154 billion, +21.6% YoY
Industry Verticals (ex Regional Markets & Others) grow +4.1% QoQ, +18.5% YoY in CC
Net Income at $1.22 billion | Growth of +32.0% YoY
Operating Margin at 25.5% | Expansion of +1.9% YoY
Order Book at $8.1 Bn | Growth of +17.3% YoY
Workforce crosses the 500K milestone: Headcount at 509,058

MUMBAI, July 08, 2021: Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading global IT services, consulting and business solutions organization, reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending June 30, 2021.

Highlights of the Quarter Ended June 30, 2021

Revenue at $6.154 billion, +2.7% QoQ, +21.6% YoY
Constant Currency revenue growth: +16.4% YoY

Operating Margin at 25.5%; expansion of 1.9% YoY
Net Income at $1.22 billion, +32.0% YoY | Net Margin at 19.8%
Net Cash from Operations at $1.39 billion i.e. 114.3% of Net Income
Highest ever quarterly net headcount addition of 20,409 |Workforce strength: 509,058
Diverse and inclusive workplace: Women in the workforce: 36.2% | 155 Nationalities

Building a G&T workforce: 407K+ employees trained in new technologies | 19K Contextual Masters identified | 3,500 Elevate graduates
Best-in-class talent retention: LTM IT Services attrition rate at 8.6%; lowest in the industry
Dividend per share: ` 7.00 | Record date 16/07/2021 | Payment date 05/08/2021

Rajesh Gopinathan, Chief Executive Officer & Managing Director, said: “I am humbled that in a personally challenging quarter to many, TCSers demonstrated phenomenal character in helping each other, being meaningful to the communities and delivered on our commitments to clients. On that backdrop, our business in North America, BFSI and Retail, all showed an appreciable growth which underlines the resilience of our operating model, relevance of our offerings and above all, the passion and dedication of our associates. Given the variants of the virus and fears of a potential third wave, we are watchful of the emerging situation and remain optimistic of the opportunities in our core markets and verticals. We are well positioned and operating diligently to participate in them aggressively.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “We overcame the challenges posed by the second wave of COVID-19 in India taking some practical approaches and I’m satisfied that the delivery of all our client engagements was kept on track. We once again had a superior quarter with a TCV of $8.1 billion which is broad based across markets and verticals. Our G+T themes are seeing traction in the market place and we are delighted to sign our largest SaaS deal ever for the TCS BaNCS Global Banking Platform on the cloud during the quarter.”

Samir Seksaria, Chief Financial Officer, said: “We crossed the $6 billion milestone in quarterly revenue this quarter. In addition to our annual salary increase and promotions, we undertook one of the largest vaccination drives in the private sector. Despite this and headwinds in regional markets, we expanded our Q1 operating margin year on year, reflecting the inherent resilience of our business model. Looking ahead, we stay focused on making the right investments to power our expansion in the growth and transformation opportunity, while sustaining our industry-leading profitability.”

Q1 Segment Highlights**

Industries: All verticals showed good sequential as well as YoY growth. Growth continued to be led by Life Sciences and Healthcare (+7.3% QoQ, +25.4% YoY). Retail and CPG also bounced back to double-digit growth, growing 4.4% QoQ and 21.7% YoY. BFSI (+3.1% QoQ, +19.3% YoY), Manufacturing (+4.8% QoQ, +18.3% YoY), Technology & Services (+5% QoQ, +12.3% YoY) and Communications & Media (+1.7% QoQ, +6.9% YoY) also saw significantly improved performance.

Markets: Growth was led by North America (+4.1% QoQ, +15.8% YoY), UK (+3.6% QoQ, +16.3% YoY), Continental Europe (+1.5% QoQ, +19.7% YoY), Latin America (+4% QoQ, +16.1% YoY) and Middle East & Africa (+4.2% QoQ, +25.3% YoY). The pandemic’s second wave impacted sequential growth in India (-14.1% QoQ, +25.3% YoY) and Asia Pacific (+2.4% QoQ, +9.3% YoY).

Services: Strengthening demand across Growth and Transformation themes drove accelerated demand across multiple service lines. Growth in the quarter was led by Cloud Platform Services, Cyber Security, Analytics & Insights and Enterprise Application Services

Consulting & Services Integration: Growth this quarter was led by cloud strategy and transformation, next-generation enterprise transformation and supply chain services, with demand led by Manufacturing & Utilities and Life Sciences among the industry verticals.
Digital Transformation Services: Business transformation initiatives using data and advanced analytics for sales growth and superior customer experience were key growth drivers, particularly in BFSI and Life Sciences. TCS DATOM™ and DAEzMo™ continue to be TCS’ differentiators. Accelerating adoption of SaaS/Cloud was another growth driver, especially in e-Commerce and customer experience across sales and service channels. Salesforce, SAP S4/HANA and Supply Chain Management posted good growth. TCS Enterprise Navigator™ and Crystallus™ have been key enablers in TCS’ transformational solutions geared to help customers in their portfolio diversification, new market entry and M&A. Cybersecurity was another strong growth driver in Q1, with broad-based demand across key industry domains and led by services in IAM, Threat detection & response and Managed Services.

Cloud Platform Services: Very strong growth in public hyperscaler cloud services as enterprises continued to prefer TCS for their multi-horizon cloud transformation journey starting with revamping their application, data and infrastructure estates, and subsequently moving on to harnessing native capabilities of the cloud for innovation, differentiation and business model change. Demand for Hybrid Cloud and FinOps continued to be strong.
Cognitive Business Operations: Strong growth propelled by driving digital transformation of operations for customers, across data center and network services, customer experience management and HR. Continuing trends of vendor consolidation, captive monetisation, increased M&A activity and first-time outsourcing drove demand. TCS extensive contextual knowledge and sophisticated assets like Cognix™, MFDM™ and ignio™ are helping gain market share as customers increasingly expect participation in business outcomes.

** Growth in CC

Research and Innovation

As on June 30, 2021, the company has applied for 5,989 patents, including 110 applied during the quarter and has been granted 1,971 patents.

Human Resources

TCS’ employee headcount crossed the 500,000 mark in Q1, with 509,058 employees as of June 30, a net addition of 20,409, its highest quarterly net addition ever. The workforce continues to be very diverse, comprising 155 nationalities and with women making up 36.2% of the workforce.

The company’s investment thrust in organic talent development initiatives has helped it build deep capabilities on newer technologies. Employees logged over 10 million learning hours in Q1. Over 478,000 employees have been trained in Agile methods and over 407,000 employees have been trained on multiple new technologies.

TCS’ philosophy of investing in people and its progressive workplace policies have resulted in industry-leading talent retention. IT Services attrition rate (LTM) was at 8.6%, the lowest in the industry.

“During the months of April and May, the second wave of pandemic has been quite demanding for the TCS Family. Our thoughts are with the families who suffered personal loss despite our best efforts. I want to acknowledge the temperament and personality of our associates who stood by each other in these stressful times. We continued to place a premium on associate health and wellbeing and have taken vaccination as a priority for all our associates, dependents and contract staff. In less than two months, over half a million associates and family members and over 70 percent of our associates have been vaccinated, and we are on track to vaccinate all TCSers and families by September,” said Milind Lakkad, Chief HR Officer. “The TCS family crossed a new milestone, with over 500,000 associates this quarter. We continue to attract the best talent across the globe with a net addition of 20,409 associates to the TCS family this quarter.”

Awards and Recognition

Business Leadership:

Ranked #1 by revenue in the UK market, among the Top 30 Suppliers of Software and IT Services to the UK Market by TechMarketView

Listed among the top 25 Best Big Companies to Work For in the UK and among the Best Companies in the consultancy sector by the Best Companies organization for prioritizing the health and wellness of its employees and investments in organic talent development.
TCS CodeVita awarded a Guinness World Records™ title as the world’s largest computer programming competition with 136,054 participants from 34 countries.
Ranked #1 in customer satisfaction in the UK in an independent survey of 250 CXOs of the largest IT spending enterprises in the UK by Whitelane Research, for the sixth time. TCS’ customer satisfaction scores were 11 percentage points higher than the average.
Won 6 Stevies® – 5 gold and 1 silver – at the 2021 Asia-Pacific Stevie Awards for driving innovation in finance, human resources, and technology, igniting organization-wide transformation, and quickly addressing the requirements of operating during COVID-19.
Won 3 gold and 2 bronze Eventex Awards for its ThisRun campaign and the Virgin Money London Marathon Event App, as well as for excellence across marketing and customer engagement.

Innovation and IP:

Awarded Best Technical Implementation for AI at the 5th Global Annual Achievement Awards for Artificial Intelligence for re-imagining pharmacovigilance by applying machine vision, artificial intelligence, smart analytics and IoT to automate the intake, processing and analysis of safety cases.
TCS’ Digital Platform for Next-Generation Agriculture Services (DNA) won the award for Excellence in IT Services for Large Enterprise at the IMC Digital Technology Awards, 2020 for seamlessly bringing together knowledge, actionable insights, farm-input sources, and commerce centers to bridge demand-supply and holistically address problems in the agricultural supply-chain ecosystem.
Won the Artificial Intelligence Breakthrough Award in the category Best AI-based Solution – Retail for TCS Optunique™ for its ability to deliver unified and contextualized experiences across the omnichannel journey by evaluating customer intent in real time.
TCS Optumera™ won the Best Self Aware Strategic Planning Product at the 2021 AI Excellence Awards for continuously monitoring thousands of customer-, market-, and vendor-behaviors; model scenarios and customer behavior to enable businesses in making AI-enabled integrated decisions.

TCS Optunique™, awarded the Best Theory of Mind Machine Learning Product at the 2021 AI Excellence Awards for its ability to drive unified personalized experiences across the omnichannel journey.
TCS’ Assisto, an innovative solution developed by TCS Rapid Labs, was awarded Social Impact Solution of the Year at the NASSCOM Engineering R&D Awards, 2021 for the use of the cognitive speech algorithms that generate speech output in the tone, mother tongue and near-real sound of the child using it.

Community:

Named in Points of Light’s Civic 50 List for the Fifth Consecutive Year for TCS’ commitment to drive social impact of its community engagement programs.

Partner:

Won the following awards and recognition from technology alliance partners:

Automation 360 Cloud Partner from Automation Anywhere in India, Middle East & Africa
LATAM 2021 Partner of the Year in the Product Sales Leadership category from Automation Anywhere
Global Partner of the Year 2020 for Integration and API from Software AG
Intel Partner of the Year 2021

System Integrator Partner Innovation award from Qlik
HPE GreenLake Ecosystem Partner of the Year 2021
Creatio Partner of the Year FY2021 Award of Excellence
Zscaler’s Global Solutions Integrator Partner of the Year 2021

About Tata Consultancy Services

Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development.

A part of the Tata group, India's largest multinational business group, TCS has over 500,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $22.2 billion in the fiscal year ended March 31, 2021, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' 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 MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit www.tcs.com and follow TCS news at @TCS_News.

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