Tata Consultancy Services (TCS) -- the country's largest IT services provider -- kicked off the corporate earnings season on Friday, October 8. In an interview to CNBC-TV-18, MD and CEO Rajesh Gopinathan, ED and COO N Ganapathy Subramaniam, CFO Samir Seksaria, and Chief HRO Milind Lakkad spoke at length about the IT major's Q2 numbers and outlook going forward.
TCS reported a net profit of Rs 9,624 crore
over revenue of Rs 46,867 crore for the quarter ended September 30, 2021, missing Street estimates. TCS said its revenue in constant currency terms grew 15.5 percent on a year-on-year basis.
Gopinathan said, “The deal wins are very healthy. At $7.6 billion, well above 1.2 times and that is much above the industry trend of 1-1.1. So, on a like-to-like basis, $7.6 billion is almost 25 percent higher than what we had reported in the same quarter of last year.”
“Growth and transformation is a common envelope in understanding a lot of individual things that we are doing. Whether it be from branding, training, service offerings, the entire spectrum of activities that we are doing can be better understood by thinking of it together as part of this growth and transformation agenda. And this is a very important strategic step and the kind of demand momentum that we are seeing and confidence that we have on the longevity of this demand momentum,” he said.
"It is that once-in-a-decade opportunity that we are talking about to double down on this strategic shift because this momentum is critical to actually allow us an opportunity to kind of build out the new areas that we are systematically going about growing," the CEO added.
Subramaniam said, “Demand environment is good and we have been hiring the talent uniformly across various quarters. Our customers do recognise that there is pressure on talent because they also face attrition whether it’s in their own organization or in their captives. So, net-net, they are accommodative about the situation and the fact is that we have been able to meet our customers’ demands for skill sets and talent and been able to execute all our programmes flawlessly."
Speaking on Tata Consultancy Services' margins, Seksaria said, “Any short-term volatility would lead to some disruption. While we are able to sustain margins in the current quarter, any short-term volatility or further tightness would lead to some variations going forward.”
Chief Human Resource Officer Lakkad said, “We have dealt with about 12-13 percent (attrition number) and that’s the number we are comfortable with, but a percentage point here and there will be manageable. Irrespective of this, we have strong machinery with our robust employer brand and a strong talent acquisition model and development model, which we do, help us manage supply-side challenges very effectively.”
“Attrition, yes, is a concern but a couple of percentage points more than our comfort, we will be able to manage,” he said.
For the entire discussion, watch the video