TCS Q4FY21 Conference Call Highlights | Yadnya Investment Academy

• The company’s revenue increased 5.9% YoY and 4.2% QoQ on a constant currency basis. Operating Profit Margins expanded by 130bps to 26.8% despite wage hikes and net profit increased 14.8%YoY and 6.3% sequentially.

TCS Con-call highlights

• FY 22 Guidance: Management believes that the IT industry has strong structural drivers – as more companies shift to digital/cloud systems, this will lead to an increase in demand for data analytics and AI. It believes to register double-digit growth in FY22, however, the company has not given any specific guidance for the same.

• Q4FY21 :

  • This quarter’s performance is mainly driven by market share gains, core transformation/digitalization (mainly on the back of shift to “Work from home” culture) and execution of large deals won earlier.

  • Highest TCV earned in history in this quarter to the tune of $9.2 bn.  

  • During Q4FY21, TCS added 7 more reselling partners to the TCS channel partner program.

• Deal wins:

  • The strong order book ($31.6bn) and robust deal pipeline of smaller deals to provide better revenue growth visibility in FY22.

  • A higher volume of smaller deals augured well for the company – digital deals have higher margins.  

  • The company is experiencing more deal wins related to growth and digital transformation than for improving client’s operation efficiency through cost-cutting measures.

  • The company looks forward to winning more deals in core transformation, App modernization, and data modernization.  

  • Ignio – Cognitive automation software finds 15 new customers

• Verticals:

  • Banking – Strong deal wins to the tune of $3.9bn. TCS’s ability to meet innovative solutions through crypto banking product, quartz blockchain product, and TCS BANCS to help the company win marquee clients in this space. Overall 19 wins in FY21 for TCS BANCS.

  •  Retail – Deal wins to the tune of $1.4bn. One deal wins from PGA superstore, AI-powered to provide a personalized shopping experience to customers. Strong demand in supply chain and omnichannel experiences.  

  • Life-sciences has recorded the highest growth in CC on a YoY basis (19%), thus increasing its revenue contribution from 4.5% in FY11 to 9.8% in FY21.

• Geography Mix: Continental Europe led the growth in terms of geography on a YoY basis supported by recent cost take-out led outsourcing deals. All other territories continue to be in the negative zone on a YoY basis. On a sequential basis, all regions registered growth in CC terms (North America – 3.9%, India – 2.8%, UK – 3.4%, and continental Europe – 8.5%).

• Employee Metrics: TCS employee strength

  • TCS was the first one to roll out wage hikes in FY21 as well as FY22. Highest addition of employees, more than 19k in this quarter. Attrition was at an all-time low of 7.2%.

  • Management has mentioned that there are no supply-side challenges.  

  • The company’s continued focus on retaining and retraining its employees has helped to gain a deep understanding of customer’s business, thus enabling the company to provide differentiated solutions