tata consultancy services - excel · pdf file3 tata consultancy services started in 1968, tcs...
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1 | Copyright © 2015 Tata Consultancy Services Limited
Tata Consultancy Services
Investor Relations
October 2015
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Investor Relations
Forward Looking Statement
Certain statements in this release concerning our future prospects are forward-looking statements. Forward-looking statements by their nature involve a number of risks and uncertainties that could cause actual results to differ materially from market expectations. These risks and uncertainties include, but are not limited to our ability to manage growth, intense competition among Indian and overseas IT services companies, various factors which may affect our cost advantage, such as wage increases or an appreciating Rupee, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on cross-border movement of skilled personnel, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which TCS has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry. TCS may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. These forward-looking statements represent only the Company’s current intentions, beliefs or expectations, and any forward-looking statement speaks only as of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements.
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Tata Consultancy Services
Started in 1968, TCS is an IT services, consulting and business solutions company, offering transformational and outsourcing services to global enterprises
FY 2015 (ending March) revenue US$ 15.45 billion
Employer of Choice, No. of Employees over 335,620
Global Presence: 232 Offices in 46 countries and 151 Solution Centers in 24 countries
First and Largest: Software Exporter from India Software R&D center in India
Part of the Tata Group (FY 2015 Rev: $109 Bn), known for its values, integrity and management excellence
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Dividends Paid56%
Capex21%
Acquisitions5%
Invested Funds18%
FY05 to FY15 934%
468%
-200%0%
200%400%600%800%
1000%
Mar
-05
Mar
-06
Mar
-07
Mar
-08
Mar
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Mar
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-11
Mar
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Mar
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-15
TCS BSE IT
$0
$5,000
$10,000
$15,000
$20,000
FY0
5
FY0
6
FY07
FY0
8
FY0
9
FY1
0
FY1
1
FY1
2
FY1
3
FY1
4
FY1
5
Rev
in U
SD M
n
0
20
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60
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120
FY0
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FY0
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FY0
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FY0
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FY0
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FY1
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FY1
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EPS
in `
The Journey so far…
…judicious usage of cash… …and higher-than-benchmark share performance
Industry-leading top-line growth… …with superior profitability…
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Headroom for Future Growth
$0
$400
$800
$1,200
2009 2019
Outsourced IT Spend in USD Bn
TCS’ market share of ~1.6%, leaves plenty of headroom for future
growth
The worldwide market for IT Services is growing faster Emergence of new technologies Rising technology intensity of business
across industries Catch-up spend in lagging verticals and
regions Greater propensity to outsource
Shorter shelf-life of technology Greater need for variablizing costs
Global sourcing has become mainstream
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Long Term Growth: Key Enablers
Strong Foundation
Broad Diversification
Elements of Strategy
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Strong Foundation
Focus on Execution - Delivery Excellence
Innovation - Essential Catalyst for Growth
Talent Management - Strong Set of Skills
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Broad Diversification
North America52.7%
UK16.4%
Continental Europe10.8%
Asia Pacific9.4%
India6.5%
MEA2.4%
Latin America1.8%
Revenue Spread across Markets
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Broad Diversification
BFSI40.5%
Retail and Distribution13.8%
Manufacturing9.8%
Telecom8.4%
Life Sciences and Healthcare
7.0%
Hi Tech5.9%
Others4.6%
Energy and Utilities4.0%
Travel and Hospitality3.6%
Media & Entertainment
2.4%
Revenue Spread across Industries
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Broad Diversification
Application Development &
Maintenance40.0%
Enterprise Solutions15.0%
Infrastructure Services14.7%
Business Process Services11.4%
Assurance Services8.7%
Engineering & Industrial Services
4.5%
Asset Leveraged Solutions
3.2%
Global Consulting2.5%
Revenue spread byService Lines
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Elements of Strategy
Key Client Focus
Integrated Full Services
Global Network Delivery Model GNDMTM
Strategic Acquisitions
Non Linear Business Models
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$14.3
$19.5
$10
$12
$14
$16
$18
$20
FY08 FY15*
$ M
n
Rev per $1 Mn+ Client
Elements of Strategy: Key Client Focus
LTM ServicesRevenue Contribution *
No. of Clients
2Q16 1Q16 2Q15
$ 100 mn+ 33 30 24
$ 50 mn+ 65 69 62
$ 20 mn+ 171 172 153
$ 10 mn+ 274 268 247
$ 5 mn+ 404 391 367
$ 1 mn+ 819 804 743
19
68
7
29
0
20
40
60
80
FY08 FY15*
$50 Mn+ $100 Mn+
Our verticalized, client-centric organization has delivered Agility & Entrepreneurial energy Improved customer intimacy Superior client metrics
The number of Large Clients has grown … …as also the per client Revenue Realization
* Includes India Business
Key Client Focus
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IT Solutions & Services
Infrastructure Services
BPS
Elements of Strategy: Integrated Full Services Play
$349
$1,808$366
$2,133
$-
$1,000
$2,000
$3,000
$4,000
$5,000
FY08 FY15
Rev
en
ue
in $
mn
Growth in BPS and IS
BPS Infrastructure Services
Mature full services capability allows better up/cross-selling
Expands our footprint beyond traditional IT services
Fully leverages our model to deliver even greater business value to the client
Keeps us relevant through every phase of the client’s business cycle
Deepens relationships and increases stickiness
Integrated Full Services
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Elements of Strategy: Global Network Delivery Model
N. America
Latin America
APACIndia
EuropeUK
MEA
10
9
3111
4 6
8
151 Solution Centers in 24 countries
Global Support for Global
Customers, Local front-end
support
Competing for significant Local
projects: Strong need for
world-class IT support
Global Network Delivery Model GNDMTM
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Elements of Strategy: Strategic Acquisitions
Nov ’05: Comicrom (Chile)
Apr ’13: Alti (France)
Apr ’14: IT Frontier Corporation (Japan)
Access to Geographies /Market
Oct ’05: Pearl Assurance (UK)
Oct ’08: Citigroup Global Services
Gain Domain/ Technology Expertise
Oct ’05: FNS (Australia)
Acquire Intellectual Property
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Elements of Strategy: Non Linear Business Models
End-to-end universal banking and insurance products and solutions
TCS Financial Solutions
Bundling BPO with a common platform shared across clientele
Diligenta: 8 Mn policies under administration, Rev run-rate of ~$400 Mn
Cloud Platforms: Revenue run-rate of $125 Mn in FY 15, up 55% YoY
Vertical: Financial Inclusion, Assessment Engine
Horizontal: HRO, F&A, Accounts Payable, Procurement, Analytics
Platform BPO
Launched in India in Feb 2011, progressing satisfactorily
SMB Platform
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Click to edit Master title styleTata Consultancy ServicesFinancial Highlights
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2Q 2016 Financial Highlights
Yearly Quarterly
Key metrics FY15 FY14 YoY 2Q16 1Q16 QoQ 2Q15 YoY
Revenue $15,454 $13,442 15.0% $4,156 $4,036 3.0% $3,929 5.8%
Gross Profit $6,877 $6,363 8.1% $1,838 $1,761 4.4% $1,745 5.4%
Gross Margin 44.5% 47.3% (284 bps) 44.2% 43.6% 60 bps 44.4% (18 bps)
Operating Income $4,150 $3,906 6.2% $1,125 $1,061 6.0% $1,055 6.7%
Operating Margin 26.9% 29.1% (220 bps) 27.1% 26.3% 78 bps 26.8% 22 bps
Net Income $3,541 $3,139 12.8% $927 $898 3.2% $872 6.2%
Net Margin 22.9% 23.4% (44 bps) 22.3% 22.2% 5 bps 22.2% 9 bps
EPS in $ $1.81 $1.60 13.0% $0.50 $0.46 9.1% $0.45 11.1%
Revenue INR mn 946,484 818,094 15.7% 271,655 256,681 5.8% 238,165 14.1%
EPS in ` 110.8 97.6 13.5% 30.9 29.1 6.0% 27.0 14.4%
IFRS Amount in US$ Million, unless otherwise mentioned
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In Summary
Global investments in technology continue to grow
Rate of change of technology is accelerating, forcing more outsourcing
Our market share is minuscule, but gaining
There is plenty of headroom for future
growth
the addressable market at a macro-level
wallet-share at a client level
TCS’ strategies for longer-term growth
have steadily expanded
Enabled leaner, more agile, entrepreneurial operations
Facilitated the building of domain expertise and industry-specific IP
Decentralized the margin responsibility and made it more stable and sustainable
A verticalized, client-centric organization
structure has
Thank You
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