Published: Fri, January 12, 2018
Finance | By Loren Pratt

TCS net falls 3.6% on fragile BFSI

TCS net falls 3.6% on fragile BFSI

Tata Consultancy Services (TCS), which announced its December quarter result on Thursday, beat market estimates. We signed our first $50M+ deal in digital this quarter, crossing an important milestone in the mainstreaming of digital technologies.

"TCS is helping to guide many of today's leading companies through their business 4.0 journeys, in building their digital spines, becoming more agile, creating superior customer experiences, and driving exponential growth", said Rajesh Gopinathan, CEO and Managing Director of Tata Consultancy Services.

Led by the gain in the stock, the companys market valuation rose by Rs 18,884.67 crore to Rs 5,37,359.67 crore. TCS' digital revenue saw an increase of about 40% year-on-year and accounted for 22.1% of the company's revenues, the company said in a statement.

Marks & Spencer will spend £25m to implement a new technology programme and outsource 250 jobs as it pushes ahead with plans to become a "digital-first" retailer.

In dollar terms under the International Financial Reporting Standards, net income at $1,012 million is 1.2 per cent up annually and 1.1 per cent up quarterly, while revenue grew 9.1 per cent annually but flat (1 per cent) quarterly at $4,787 million.

The agreement, a multi-year partnership with more than United States dollars 2 billion of revenues to TCS, is expected to be completed by the second quarter 2018.

The Mumbai-based tech firm's volume growth was the highest in the last three years at 1.6% last quarter, which is generally considered weak. "TCS was carefully selected because of their significant, ongoing investments in technology and their expertise in the insurance and annuity industry", said Mark Mullin, Transamerica President & Chief Executive Officer.

Rajesh Gopinathan, the CEO and MD of TCS pointed out that Europe is likely to become its second largest market after the USA, sometime in the next four quarters.

The American company said it expects to save $70 million initially, growing to $100 million overtime, from the contract, indicating the deal should generate several hundred million dollars in revenue for TCS every year.

Total employee strength of TCS at end of Q3FY18, stood at 390,880 on consolidated basis, with gross addition of 12,534 employees and net addition of 1,667 employees.

It added that employees transitioning to TCS will be given the opportunity to remain in the same U.S. cities where they are now based.

The shares also quoted a high of Rs 2,820.10 and a low of Rs 2,781.90 during the intra-trading sessions on the BSE.

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