TCS on a strong growth trajectory: Chairman N Chandrasekaran to investors

The company said in its annual report for FY21 said that in a highly fragmented global IT services market, it has grown at twice the rate of market growth over the past decade

India’s largest IT services player, Tata Consultancy Serv­ices (TCS), said in its annual report for financial year 2020-21 (FY21) that in a highly fragmented global market, it has grown at twice the rate of market growth over the last decade.
 
TCS is among the largest IT services providers globally, with a market share of 1.6 per cent, it said the company in its annual report.
 
N Chandrasekaran, chairman of TCS, said in a letter to shareholders: “Your company sees immense opportunities for growth, riding the new technology cycle that has kicked off, powered by the belief that its differentiated capabilities and collaborative, solution-centric approach makes it the preferred transformation partner of its customers.” He also said the year gone by saw an important inflection point that has huge implications for enterprise consumption of technology in the coming years, and on demand for TCS’ services.
 
TCS, which reported one of its highest-ever TCV (total contract value) in Q4FY21 at $9.2 billion, saw its full-year order booking at $31.6 billion, a 17 per cent growth year-on-year.
 
Rajesh Gopinathan, CEO and MD, said the company is entering FY22 with strong growth momentum and much better visibility for future growth than last year, powered by a strong order book and a robust deal pipeline.
 
“We see this technology shift as the start of a multi-year technology upgradation cycle in which the abundance of native capabilities will constantly expand the art of the possible, opening up newer opportunities for technology-driven differentiation,” said Gopinathan.
 
Gopinathan said the ever-increasing reliance of enterprises on technology to drive differentiation, TCS’ customers’ cloud transformation journeys will play out over three horizons, spread over the next three to five years and beyond.

 
The events of FY21 have kick-started the journey across the first of those horizons for many enterprises. Migration to the Cloud is a material transformation that will play out over the next two to three years, said Gopinathan in the letter to shareholders in the annual report.
 
“The outcome of this first phase of transformation will be a resilient, future-ready digital technology stack that supports leaner, more agile operations and serves as a scalable foundation for growth and the subsequent horizons of transformation. In the second horizon, we expect to start helping our customers leverage the rich native capabilities of these stacks around analytics, AI and ML to build new systems of customer engagement, new systems of differentiation and experiment with new business models,” he said.
 
Human resources
 
The company’s annual Report also gave a glimpse of how it is engaging with its over 450,000 employees. One key focus area is reskilling, while trying to lower the attrition rate and retaining talent. For FY21, the company’s Learning Intensity has increased significantly, by almost 37 per cent, it said.
 
The company launched TCS Elevate, a merit-based talent framework to further tighten linkage between learning and careers, and to drive a culture of continuous learning and aspiration. Over 138,000 associates have been on-boarded to this programme.
 
In the fiscal, TCS had a net hire of 40,185, but over 368,000 students from over 3,100 colleges attended the TCS NQT. A digital online onboarding model helped TCS to effectively integrate associates hired across the globe.
 
Milind Lakkad, CHRO, said in the annual report that the company’s sustained investments in organic talent development are paying off. “Our talent development infrastructure is helping us align our planning with emerging customer requirements. So we are fulfilling most of the open positions requiring new technology skills using in-house groomed candidates, and don’t rely too much on lateral recruits. Additionally, we have created a deep pipeline of digital talent by hiring over 30,000 fresh engineering graduates each year, including a cadre of high performers, and training them on new technologies which are most in demand,” he said.