TCS shines in Q3 thanks to digital and IoT wins

TCSQ3 2017
IT services company Tata Consultancy Services (TCS) announced financial results for third quarter ended December 31, 2017.

Revenue of TCS rose 9.1 percent year on year and 1 percent quarter on quarter to $4,787 million in Q3 fiscal 2017-18 with a net income of $1,012 million that grew 1.2 percent year on year and 1.1 percent quarter on quarter.

TCS said digital revenue contribution was 22.1 percent, achieving growth of +39.6 percent year on year and +13.9 percent quarter on quarter.

TCS has an employee base of 390,880 with gross addition of 12,534 employees in the third quarter.

Quarterly growth

North America 1.5 percent
Latin America 5 percent
Continental Europe 2.6 percent
Retail & CPG 6.4 percent
Energy & Utilities 8.5 percent
Life Sciences & Healthcare 2.5 percent
Travel & Hospitality 2.9 percent

The yearly growth in outsourcing business revenue was 8.2 percent in the UK, 4.1 percent in India and 2.8 percent in North America.

Rajesh Gopinathan, CEO and MD of TCS, said: “We wrapped 2017 with a strong performance in the December quarter, marked by the signing of industry-defining deals, robust client metrics and broad-based demand across industry verticals. As lagging parts of our portfolio turn around, and areas of softness reduce, we are well placed for stronger growth ahead.”

TCS signed its first $50 million deal in digital space this quarter, crossing an important milestone in the mainstreaming of Digital technologies.

TCS bagged more than 15 major wins in Cyber Security space, led by demand for services around GDPR, Identity & Access Management, and Vulnerability Management.

TCS won over 10 IoT deals. Rolls Royce chose the TCS Connected Universe Platform (TCUP) to underpin its next generation products and services.

Technology Business Review in its analyst report said TCS revenue expanded 9.1 percent year-to-year in 4Q17, up from 8.3 percent growth in 3Q17 and TCS’ most robust year-to-year growth since 2Q15, as the company ramped up a slew of recent large-scale deal wins and booked additional strategic awards in digital and cognitive solutions.

As a proportion of total sales, digital revenue increased to 22.1 percent of sales in 4Q17, up from 19.7 percent in 3Q17, 18.9 percent in 2Q17 and 16.8 percent a year ago.

“TCS will maintain high-single-digit growth through 2018, possibly breaking into double-digit expansion as recent digital awards scale up and new consulting-led digital transformation, Internet of Things and cognitive solutions contracts fill the company’s pipeline,” said John Caucis, senior analyst at Technology Business Review.

Digital wins

TCS was selected by a European retailer as a partner for digital marketing transformation to provide customers with a conversational and contextual experience across multiple global channels, while taking the mass-personalization capability of the retailer to the next level.

TCS was chosen by a UK based insurance firm as the partner to chart the roadmap to transform its procure-to-pay business process to be more agile with the next generation cloud capabilities.

TCS will assist a German lens manufacturer to conceptualize and bring out a first-of-its-kind offering with sophisticated centration, position of wear and related capabilities built on an IoT framework of intelligent devices to drive next generation automation and deliver a friction-free customer experience.

TCS will help a Japanese hi-tech firm to engineer safety, security monitoring features in their Data Centers while minimizing their carbon footprint through a Remote Energy Management solution.

TCS will assist a European telecom company to improve visibility on expenditures using machine learning and AI techniques, and leverage the power of analytics to provide greater HR and talent insights.

TCS will help a Canadian insurer to develop the blueprint for an enhanced user experience – a key element of their competitive differentiation – using TCS’s Service Design methodologies.

TCS will assist a UK retailer as their cloud transformation partner for their application modernization program leveraging the Microsoft Azure Cloud.

TCS will assist an American investment management company to deliver disruptive methods of augmenting traditional channels with automated self-service for superior customer experience.

TCS will assist a Indian private bank for big data architecture and design consulting for enabling next generation security analytics capabilities.

An Australian oil and gas company has selected TCS as the partner for their digital transformation journey to improve business stakeholder value leveraging cloud technologies.

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