TCS revenue slips 1.7% to $5.42 bn as Covid-19 hits IT spending

Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions supplier, reported marginal drop in revenue for the quarter ending September 30, 2020 as the Covid-19 epidemic started hitting IT spending among enterprises.
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TCS has posted revenue of $5.424 billion (+7.2 percent QoQ and –1.7 percent YoY) and net income of $1.14 billion (+23.4 percent QoQ and +0.2 percent YoY) during the second quarter of fiscal 2020-21.

Worldwide IT spending is projected to drop 7.3 percent to $3.5 trillion in 2020, according to Gartner report released in May.

“Overall IT spending is still expected to sharply decline in 2020 but will recover in a faster and smoother manner than the economy,” said John-David Lovelock, distinguished research vice president at Gartner.

Gartner said IT Services revenue will decrease 6.8 percent to $969,438 million during the current year.

TCS said headcount reached 453,540 with a net addition of 9,864. Women representation in the workforce of TCS reached 36.4 percent.

TCS said IT Services attrition rate hits an all-time low at 8.9 percent LTM.

The Gartner report indicated that enterprise CIOs will gravitate toward spending on subscription products and cloud services to lower upfront costs. Infrastructure-as-a-service (IaaS) is expected to grow 13.4 percent to $50.4 billion in 2020 and 27.6 percent to $64.3 billion in 2021.

Gartner suggests that CIOs with less immediate cash on hand should plan on becoming more digital than they had originally anticipated at the start of 2020.