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8/13/2019 TCS IR Presentation Q2 FY14
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Tata Consultancy ServicesInvestor Relations
October 2013
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Investor Relations
Forward Looking Statement
Certain statements in this release concerning our future prospects are forward-looking statements.Forward-looking statements by their nature involve a number of risks and uncertainties that couldcause actual results to differ materially from market expectations. These risks and uncertaintiesinclude, but are not limited to our ability to manage growth, intense competition among Indian andoverseas IT services companies, various factors which may affect our cost advantage, such as wageincreases or an appreciating Rupee, our ability to attract and retain highly skilled professionals, timeand cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on
cross-border movement of skilled personnel, our ability to manage our international operations,reduced demand for technology in our key focus areas, disruptions in telecommunication networks,our ability to successfully complete and integrate potential acquisitions, liability for damages on ourservice contracts, the success of the companies in which TCS has made strategic investments,withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital oracquiring companies outside India, unauthorized use of our intellectual property and generaleconomic conditions affecting our industry. TCS may, from time to time, make additional written andoral forward-looking statements, including our reports to shareholders. These forward-lookingstatements represent only the Companys current intentions, beliefs or expectations, and any
forward-looking statement speaks only as of the date on which it was made. The Companyassumes no obligation to revise or update any forward-looking statements.
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Tata Consultancy Services
Started in 1968, TCS is an IT services, consultingand businesssolutionscompany, offering transformationaland outsourcingservices to global enterprises
FY 2013 (ending March) revenueUS$ 11.57 billion
Employer of Choice, No. of Employees over 285,250
Global Presence: 199offices in 44 countries
First and Largest:
Software Exporter from India
Software R&D center in India
Part of the Tata Group (FY 2012 Rev: $100 Bn), known for its values,integrity and management excellence
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The Journey so far
Industry-leading top-line growth with superior profitability
and higher-than-benchmark share performancejudicious usage of cash
* FY05 to FY13
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Headroom for Future Growth
The worldwide market for ITServices is growing
Technology intensity is going upacross verticals
Lagging verticals and regionsare catching up
Emergence of newtechnologies
The proportion of outsourced ITServices is growing
Shorter shelf-life of technology
Greater need for variablizingcosts
Global sourcing has become amainstream option
TCS market share of ~1.3%,leaves plenty of headroom forfuture growth
Source: Gartner
Worldwide spend on IT Services Outsourcing
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Long Term Growth: Key Enablers
Positioning for a long term growth
1. StrongFoundation
2. BroadDiversification
3. Elements ofStrategy
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Long Term Growth: Key Enablers
Focus on ExecutionDelivery Excellence
InnovationEssential Catalyst for Growth
Talent ManagementStrong Set of Skills
Strong Foundation Broad Diversification Elements of Strategy
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Long-term Growth: Key Enablers
a. Revenue Spread
Across Markets
Strong Foundation Broad Diversification Elements of Strategy
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Long-term Growth: Key Enablers
b. Presence
Across
Industries
Strong Foundation Broad Diversification Elements of Strategy
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Long-term Growth: Key Enablers
c. Offerings
Across
Services
Strong Foundation Broad Diversification Elements of Strategy
* Includes Business Intelligence
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Long Term Growth: Key Enablers
1. Key Client Focus
2. Integrated Full Services
3. Global Network Delivery Model GNDMTM
4. Strategic Acquisitions
5. Non Linear Business Models
Strong Foundation Broad Diversification Elements of Strategy
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Long Term Growth: Key Enablers
1. Key Client Focus
Guided by Customer Relevancy,our verticalized, client-centricorganization has delivered
Agility & Entrepreneurial energy
Improved customer intimacy
Superior client metrics
Strong Foundation Broad Diversification Elements of Strategy
LTM Revenue
Contribution
No. of Clients
2Q14* 1Q14* 2Q13
$ 1 mn+ 687 657 538
$ 5 mn+ 318 309 269
$ 10 mn+ 224 216 182
$ 20 mn+ 125 124 108$ 50 mn+ 53 53 45
$ 100 mn+ 22 19 14* Includes India Business
The number of Large Clients has grown as also the per client Revenue Realization
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Long Term Growth: Key Enablers
2. Integrated Full Services
Mature full services capabilityallows better up/cross-selling
Expands our footprint beyond
traditional IT services
Fully leverages our model todeliver even greater businessvalue to the client
Keeps us relevant through everyphase of the clients businesscycle
Deepens relationships andincreases stickiness
Strong Foundation Broad Diversification Elements of Strategy
BPSIT Solutions
& Services
InfrastructureServices
BPS
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Long Term Growth: Key Enablers
Strong Foundation Broad Diversification Elements of Strategy
3. Global Network Delivery Model GNDMTM
N.America
Latin America
APACIndia
EuropeUK
MEA
7
9
292
1 5
8
USA
China
Hungary 124 Solution Centers in 21 countries
Mexico
Brazil
Uruguay
Global Support for GlobalCustomers
Competing for significantLocal projects: Strong needfor world-class IT support
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Long Term Growth: Key Enablers
4. Strategic Acquisitions
Enter new geographies / market segments
Gain domain / technology expertise
Acquire Intellectual property
Strong Foundation Broad Diversification Elements of Strategy
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Long Term Growth: Key Enablers
5. Non-Linear Business Models
TCS Financial Solutions: End-to-end universal banking andinsurance products and solutions
Platform BPO: Bundling BPO with a common platform sharedacross clientele
Vertical: Insurance, Banking
Horizontal: HRO, F&A, Procurement, Analytics
Small & Medium Business Platform: Launched in India in Feb 2011,progressing satisfactorily
Strong Foundation Broad Diversification Elements of Strategy
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2Q 2014 Financial Highlights
Key metrics FY13 FY12 YoY 2Q14 1Q14 QoQ 2Q13 YoY
Revenue $11,568 $10,171 13.7% $3,337 $3,165 5.4% $2,853 17.0%
Gross Profit $5,339 $4,661 14.5% $1,602 $1,464 9.4% $1,293 23.9%
Gross Margin 46.15% 45.83% 48.01% 46.26% 45.32%
Operating Income $3,123 $2,806 11.3% $1,007 $856 17.6% $763 32.0%
Operating Margin 27.00% 27.59% 30.18% 27.05% 26.74%
Net Income $2,561 $2,214 15.7% $748 $668 12.0% $643 16.3%
Net Margin 22.14% 21.77% 22.42% 21.11% 22.54%
Revenue INR mn 629,895 488,938 28.8% 209,772 179,871 16.6% 156,208 34.3%
IFRS USD Mil l io n
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In Summary
There is plenty of headroom for future growth
Global investments in technology continue to grow
Rate of change of technology is accelerating, forcing more outsourcing
Our market share is minuscule, but gaining
TCS strategies for longer-term growth have steadily expanded
the addressable market at a macro-level
wallet-share at a client level
A verticalized, client-centric organization structure has
Enabled leaner, more agile, entrepreneurial operations
Facilitated the building of domain expertise and industry-specific IP
Decentralized the margin responsibility and made it more stable andsustainable
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Thank You