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TCS' margin levels sustainable because of investments made: CEO Rajesh Gopinathan

Updated : January 11, 2021 12:23 PM IST

Tata Consultancy Services (TCS) CEO and MD Rajesh Gopinathan on Monday said that the company's margin levels are sustainable because of the investments made to significantly increase competitiveness.

“We believe over the multiyear horizon, across the full cycle, margin levels are sustainable because of the investments that we have made to significantly increase our relative competitiveness," said Gopinathan in an interview with CNBC-TV18, after the firm reported better-than-expected Q3 results.

TCS kick-started the earnings season with a bang with the highest December-quarter growth rate in the last 9 years and the best margin performance in the last 5 years. India's largest software services firm on Friday reported a 7.2 percent year-on-year (YoY) rise in consolidated net profit at Rs 8,701 crore for the December quarter.

“We had set an internal target to achieve year-on-year revenue parity and I am happy to see that both on revenue as well as on the margin side, we have achieved that and not just achieved that but achieved in a sustainable way,” said Gopinathan.

On the margin front, he said, “Margin is a factor of growth but more than growth, it’s of relative competitiveness and that’s why we have been confident about our margin strategy over multiple cycles.”

Meanwhile, NG Subramaniam, the Chief Operating Officer of the company, said that December-quarter results were ahead of their own estimates and that the firm is confident about capturing demand.

Milind Lakkad, Global HR Head, expects attrition to increase marginally going ahead.

“I won’t be able to give a number at this point in time, but it’s going to be a marginal increase considering that the situation (pandemic) is getting better,” said Lakkad.

TCS shares were trading over 1 percent higher at Rs 3161.95 per share on the BSE, at 12.10 pm.

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