They finally got there! TCS, the leader among the India-based offshore IT/BP services firms, closed the year (to 31st March) with revenues exceeding $10b – a target management had boldly set in 2007 with the intention to get there by March 2010. At the time, the target did not look unreasonable. Indeed, in those heady days pre-financial meltdown you could argue it was not bold enough! But of course 'events' intervened. Nevertheless, even two years late, it’s another ‘first’ for TCS and cements its position among the global IT/BP services leaders.
TCS neatly sidesteps much of the risk of ‘missing the numbers’ simply by not giving any ‘guidance’. As it turns out, Q4 was a relatively subdued quarter, with revenues essentially flat sequentially at Rs132.6b, but 31% higher yoy. In USD terms, Q4 revenues hit $2.65b, 18% higher yoy and 2.4% higher qoq. In contrast, Infosys’ USD revenues fell 1.9% qoq (see Infosys misses Q4 revenue target). FY revenues – at $10.2b to be more precise – were up 24% yoy (23% at constant currency). Operating margins fell 44bps yoy to 27.6% but frankly who’s complaining?
Although he would not elaborate, TCS CEO N. Chandrasekaran said he was “confident of delivering good growth this year”. How that compares with Infosys’ outlook of 8-10% growth is of course subject to conjecture, but somehow I don’t think single digits are what Chandra has in mind as ‘good growth’.
There’ll be much more on this – including our analysis of TCS’ performance in the UK – for eligible TechMarketView subscription service clients in OffshoreViews.