The changes that the IT industry is witnessing now will play out over multiple years which gives Tata Consultancy Services (TCS) long-term visibility in both, the direction of technological change as well as its acceptability, said Rajesh Gopinathan, MD & CEO of the company. "That is what we are investing in, betting into," he said.
"It’s not a sprint that we are gearing ourselves up for but a sustained long-term marathon with very clear visibility on what the course is and what the final destination is,” Gopinathan said.
India's largest IT company TCS reported constant currency revenue growth of nearly 5 percent while margins crossed 26 percent for the first time in two years.
While talking about Q2 performance, the MD said, "We believe that there is increased adoption of cloud."
He added that the margin aspirations that the company has are real and achievable. "The timing of it will depend on multiple parameters, but long-term demand and growth visibility is a big lever for margin support. So it is net positive for margins.”
On the near-term outlook, Gopinathan said the company remains more confident about the firm than what was shared in the last management commentary. "We caveated saying that this is the basis for which we are going forward and we are making our investment on that basis, now we have the results and the outcomes behind us. So it gives us even more confidence in what we have shared with you. No change to what we have said.”
On customer additions, he mentioned, “If you look at new customer additions in the 1 million, 5 million, 10 million kind of a range, you will see a steady expansion of the base of the pyramid, which is always a good indicator of how new customer additions are coming through."
The company board has also approved a share buyback up to Rs 16,000 crore at Rs 3,000 per share. The buyback price of Rs 3,000 is at a 9 percent premium to the current market price (CMP). The IT bellwether will buy back a maximum of 5.33 crore shares, equivalent to 1.42 percent equity.
The company board has also announced a salary increase which will be effective from October 1, 2020.