TCS sees digital services as over $5-bn opportunity

Company CEO and MD, N Chandrasekaran, says run rate will not touch the $5 bn mark but it will definitely touch a few billion dollars

Country's largest IT services firm Tata Consultancy Services (TCS) expects digital platforms like cloud, Big Data and mobility solutions to bring in cumulative revenues of over $5 billion in next few years.

Earlier, the Mumbai-based firm had said that it expects to do $5 billion cumulative business over the next three to four years from the "digital opportunity".

"The way to look at it is that, when I originally said it, I said that over the next three to four years we will do $5 billion cumulative. But now, I think we will do much more than that on a cumulative basis," TCS CEO and Managing Director N Chandrasekaran told analysts.

The run rate will not touch the $5 billion mark but it will definitely touch a few billion dollars, he added.

He said the opportunity is huge as most of the ADM work that is getting replaced or rationalised is moving into digital.

"Most of the infrastructure contracts come up with outsourcing of infrastructure to maintain the service levels in a managed services model, but with a transformation component to move to cloud infrastructure," he said.

And commoditised applications, when they are transitioned, customers are willing to look at application platforms which are cloud-based, he added.

"So, all these three facts will definitely move things to Digital," he said.

Chandrasekaran, who recently got a five-year extension, said at the announcement of the firm's second quarter results that TCS is contemplating whether to disclose numbers from the digital technologies stream.

For the July-September quarter, the Mumbai-based company posted 13.2% jump in its net profit at Rs 5,244 crore as against Rs 4,653.9 crore in the year-ago period.

Revenue jumped 13.5% to Rs 23,816 crore in the second quarter ended September 30 as compared to Rs 20,977 crore in the corresponding period of last year.

However, on a quarter-on-quarter basis, net profit was down by 5.8%, but revenue grew 7.7%.