TCS Demonstrates Operational Resilience While Positioning for Growth Recovery

Mumbai: 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, 2020.

Highlights of the Quarter Ended June 30, 2020

• Revenue at $5.059 Bn, -7.8% YoY
• Constant Currency revenue growth: –6.3% YoY
• Net Income at $925 Mn, -20.8% YoY
• Operating Margin at 23.6%; Net Margin at 18.3%
• Strong Cash Conversion: Operating Cash Flow at 132.6% of Net Income
• Consolidated headcount: 443,676 | Women in the workforce: 36.2%
• 353K+ employees trained in new technologies
• Industry-leading talent retention: IT Services attrition rate at 11.1% LTM
• Dividend per share: ` 5.00

Record date 17/07/2020; Payment date 31/07/2020

Commenting on the Q1 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said,“The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth.”

He added, “After an initial period of disruption, customers have now stabilized their operations and are now embarking on new beginnings to adapt and thrive in a post-pandemic world. We are seeing many customers focus on front-end transformation, resulting in significant traction for our products and services. The other big investment themes are around driving operational resilience, adaptability and optimization. We signed several large core transformation programs encompassing operations, applications, cloud and cybersecurity. Our Machine First™ approach, delivered using the Secure Borderless Workspaces™ model is helping us win such opportunities. Very encouragingly, we saw customers launch new business transformation programs or restart deferred programs during the quarter. This is indicative of business confidence returning in pockets.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said,“The location-independent way of working is gaining traction. Our customers are quite comfortable integrating the remote workforce, using new collaborative technologies to get work done. Our Secure Borderless Workspaces™ model has been institutionalized. We have been able to seamlessly adapt and extend it to prospect for new business, sell, contract and execute programs.”

He added, “The resilience and adaptability that we have shown in supporting all our customers over the last three months bodes well for our relative competitiveness going forward. Despite the continued uncertainty and weakness in all major economies, we have had very healthy deal closures and a strong pipeline. We will stay focused on helping our customers overcome the current challenges and prepare for the growth ahead.”

V Ramakrishnan, Chief Financial Officer, said, “We have taken a supportive approach to employees and vendors, and used other efficiency levers to limit the impact of the sharp revenue decline during the quarter, and still delivered an industry-leading operating margin. Disciplined execution resulted in superior cash conversion and a strong cash balance that positions us very well to weather the downturn.”

IFRS Financial Statements

Consolidated Statements of Comprehensive Income

For the three-month periods ended Jun 30, 2019 and Jun 30, 2020

(In millions of USD, except per share data)

Consolidated Statements of Financial Position

As of Mar 31, 2020, and Jun 30, 2020

(In millions of USD)