TCS: AI.Cloud, Enterprise Solutions, IOT&DE and Cyber Security Led Q4 Growth

Record Deal Wins and Robust Margins Mark Strong Finish to TCS’ FY24

K Krithivasan, Chief Executive Officer and Managing Director, TCS

FinTech BizNews Service    

Mumbai, April 13, 2024: Tata Consultancy Services (BSE: 532540, NSE: TCS) reported its consolidated financial results according to Ind AS and IFRS, for the quarter and full year ending March 31, 2024.

K Krithivasan, Chief Executive Officer and Managing Director, said: “We are very pleased to close Q4 and FY24 on a strong note with the highest ever order book and a 26% operating margin, validating the robustness of our business model and execution excellence. In an environment of global macro uncertainty, we are staying close to our customers and helping them execute on their core priorities with TCS’ portfolio of offerings, innovation capabilities and thought leadership.”

N Ganapathy Subramaniam, Chief Operating Officer and Executive Director, said: “Our Q4 performance is robust, with broad based deal wins across industries and geographies. Our products and platforms business sparkled with the mega deal win at Aviva and emerging markets had another stellar growth quarter demonstrating the power of TCS’ diversified portfolio.”

Samir Seksaria, Chief Financial Officer, said: “In FY 2024, our disciplined approach to operations have helped us expand our industry-leading margins. In a challenging environment, we persisted with our long-term investments in workforce reskilling, research and innovation. We will continue to drive efficiencies and competitiveness to capture opportunities for growth with profitability.”

Milind Lakkad, Chief HR Officer, said: “We are pleased to announce the annual increments for our workforce, as we have done consistently every year, with top performers receiving double digit hikes. The reduced attrition at 12.5%, enthusiastic response to our campus hiring, increased customer visits and employees returning to the office have resulted in great vibrancy in our delivery centres and elevated morale of our associates."

Q4 and Full Year Segment Highlights

Growth by Domain

Growth by Markets

 

 Services: In a challenging macro environment, clients are prioritizing initiatives that reduce cost, increase business agility, improve security posture and resilience.

Win themes across key deals involved Cloud Migration and Modernization, GenAI, Enterprise application services, Identity & Access Management, Connected Devices, Digital Workplace Services, Network Services and Vendor Consolidation.

AI.Cloud, Enterprise Solutions, IOT&DE and Cyber Security led the growth this quarter.

Analyst rankings: 80% leadership positions across all key service areas (Application Transformation, Consulting, AI & Analytics, Cloud, IoT & Digital Engineering, F&A, Procurement, Assurance, Enterprise Application Services, Security, Infrastructure).

• AI.Cloud: During this quarter, we saw significant demand for Cloud, data platforms and Gen AI across industry segments. Clients are seeking to harness these technologies to reimagine customer experience, simplify their technology estate and transform their operating model. Clients continued to scale their experimentation with Gen AI and went live with an increasing number of use cases. We are progressing well on our mission to organically reskill our workforce on AI and Gen AI. TCS is a launch partner for the newly announced AWS Generative AI Competency. Our Responsible AI Framework for Azure has been launched in Azure Marketplace.
• Cyber Security: We saw continued growth momentum this quarter with good traction in Identity and Access Management (IAM), Governance Risk Compliance and Network Security and Platforms. We are expanding footprint across all client segments, with clients seeking an integrated services approach to enterprise security. We launched and saw good traction with our AI and Gen AI Security offerings. We continue to expand our domain focused offerings across industry segments.
• Enterprise Solutions: During this quarter, we saw strong demand from clients for Enterprise Application Services. Clients continue to make significant investments in their digital core through an ERP led Transformation approach. There is also significant interest in enhancing user and customer experience through Low Code No Code applications. Our portfolio of offerings in SAP S/4HANA, Salesforce, ServiceNow, Oracle Cloud and JDE platforms saw significant traction. Our investments in building a domain-based catalogue of GenAI use cases, Sustainability offerings on major ERP platforms and assets under the umbrella of Crystallus™ saw good momentum this quarter.
• IoT & Digital Engineering: Strong growth was led by multiple transformation programs and demand for next generation solutions across connected plants, connected services and intelligent product engineering. Key services leading the growth were Factory of the Future, Electric Vehicles and Software Defined vehicles, Digital thread, Digital Twins and Medical Devices Engineering. IoT enabled connected devices and shop floor manufacturing are seeing greater adoption at scale, along with early pilots and adoption of Gen AI. Among industry groups, TSS, CBG, Manufacturing and LSHCERU saw greater traction.
• Cognitive Business Operations: IT Infrastructure Services led the growth this quarter with strong deal wins powered by Cognix. Key themes were reimagining digital workplace services, transforming enterprise network infrastructure, and vendor consolidation. Clients also partnered with TCS for Business Process Services including first time outsourcing, agile and resilient supply chain operations, and transforming employee experience amongst others.
• TCS Interactive: During this quarter clients partnered with TCS Interactive across a wide range of engagements including, relaunch of digital presence using design language, transform online channel experience, run E-Commerce command center, audit retail media network maturity, marketing agency and for Product engineering services. We also saw good traction with our unique Apple Vision Pro based immersive airline experience solution, TwinX (AI) enabled smart marketing concierge solution and immersive commerce solutions.

Key Highlights

• Signed a strategic partnership with Ramboll, a global architecture, engineering, and consultancy company headquartered in Denmark, to manage Ramboll’s cloud and data centers, application development and maintenance, Cyber Security and Digital Workplace. This will set a digital foundation for Ramboll’s business growth, help to reduce its climate footprint, and increase scalability.
• Announced a 15-year expansion of partnership with Aviva, the UK’s leading Insurance, Wealth and Retirement provider, to transform its UK Life business and enhance customer experience leveraging the TCS BaNCS™ platform. The end-to-end policy administration and servicing will expand to cover over 5.5 million policies, to be managed by Diligenta, TCS’ FCA regulated subsidiary in the UK, on behalf of Aviva.
• Enabled Euroclear Finland, the National Central Securities Depository (CSD) of Finland in the integration of its core platform with the European Central Bank’s TARGET2-Securities (T2S) platform. This has ensured easier cross-border settlements and will attract more investment into the country.
• Selected by Central Bank, a leading Midwest regional bank, for TCS BaNCS™ to modernize its core technology infrastructure, drive innovation, and strengthen customer relationships. Central Bank’s strategic partnership with TCS aims to create frictionless and flexible customer onboarding processes, enabling continued growth for the bank.
• Signed an agreement with Nuuday, Denmark’s leading digital connectivity and communications provider, to drive a complex cloud transformation. As part of this multi-million-dollar deal, TCS will migrate Nuuday’s IT infrastructure to the TCS hybrid cloud, paving the way for future transformations.
• Announced a strategic partnership with Enento Group, a prominent provider of digital business and consumer information services in the Nordic region. As part of this multi-year collaboration, TCS will transform Enento’s IT applications, cloud, digital workplace, and IT security for resilient business operations. TCS’ cloud and DevOps solutions will help accelerate Enento’s business agility and provide a best-in-class digital customer experience.
• Selected by Toyota Motor North America as its strategic partner to consolidate their supplier landscape, transform their IT infrastructure, Site Services, Corporate and Plant customer experience. This partnership aims at bringing standardization, delivering synergies at scale and reduce technical debt by leveraging Gen AI and automation to deliver an omnichannel experience.
• Ontario Teachers' Pension Plan (OTPP) has renewed its longstanding strategic relationship with TCS for IT managed services / transformation initiatives, solidifying the relationship between the two organizations. The decision to renew the partnership underscores the successful collaboration between OTPP and TCS, characterized by service transformation, reliability, and a shared commitment to excellence. With a focus on providing domain expertise, accelerating cloud migration, and driving automation initiatives, TCS is poised to continue supporting OTPP's strategic objectives and ensuring future success.
• Extended partnership with AkzoNobel, a Dutch multinational paints and coatings company to leverage its contextual knowledge and technical expertise to maintain the stable application portfolio and drive simplification of business operations, leverage Gen AI and hyper automation to elevate user experience across value chains. TCS will also help AkzoNobel in building business capabilities, improve time to market by engaging multiple digital transformation initiatives at scale.
• A leading UK based financial group has partnered with TCS to implement network security solution to give its users the fastest, most secure access to private applications while enabling zero trust connectivity for workloads. This solution minimizes security risks and mitigates lateral threat movement through advanced segmentation and AI-powered, context-aware policies.
• Expanded strategic partnership with easyJet, a leading European airline, to transform its IT operations landscape. TCS will establish an entirely new platform-based futuristic operating model, leverage cutting-edge technologies, deploy TCS solutions TCS Cognix™, ignio™ AIOps to modernize the infrastructure and migrate the DC to the cloud to provide best-in-class services. This will improve operational agility, enhance competitiveness, drive sustainable growth and enable easyJet to provide the best possible travel experience to its customers.  
• Selected by Australia’s largest e-health company, providing software products, solutions and platforms, to develop a robust software product offering to manage the operations of next-gen health sector as well as transformation of acquired business processes. TCS will build future ready platform for multiple lines of businesses, including marquee customers backed by the local government.
• TCS has been selected as a strategic partner by the French entity of a Global Insurer to provide agility to the business by operating model transformation in Application development and maintenance. As part of the multi-year contract, TCS will bring its best-in-class agile delivery models which will help the Insurer’s IT in strengthening the delivery to provide continuous value to business.
• Brought our global network of Pace Ports to London, which is set to become a dynamic center for cutting-edge technology, research, and development in the region. Leveraging TCS's extensive expertise in technology-based business transformation, the hub will serve as a catalyst for the adoption of innovation-led solutions.
• Partnered with Macquarie University to launch the TCS GoZero Hub, a research and innovation center to guide Australian organizations in their journeys towards net zero carbon emissions. Aligning with the central themes of COP28, this hub will focus on five core themes – energy transition, carbon management, nature positive future, circular economy and sustainable waste management, and climate adaptation and resilience – and how to limit and prepare for future climate change.