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Strong Revenue Growth and Margin Expansion Mark TCS Q2

NEW YORK and MUMBAI, India, Oct. 7, 2020 /PRNewswire/ — Tata Consultancy Services (BSE: 532540, NSE: TCS), the leading global IT services, consulting and business solutions organization, reported its consolidated financial results according to Ind AS and IFRS, for the quarter ending September 30, 2020.

Highlights of the Quarter Ended September 30, 2020 

  • Revenue at $5.424 Bn, +7.2% QoQ, -1.7% YoY
  • Constant Currency revenue growth: +4.8% QoQ, –3.2% YoY
  • Net Income at $1.14 Bn*, +23.4% QoQ, +0.2% YoY
  • Operating Margin expands 2.2% YoY to 26.2%*; Net Margin at 21%*
  • Strong Cash Conversion: Net Cash from Operations at $1.44 Bn | 125.9% of Net Income*
  • Consolidated headcount: 453,540 | Net addition: 9,864 | Women in the workforce: 36.4%
  • 352K+ employees trained in new technologies; 427K+ on Agile methods
  • Already a global benchmark, IT Services attrition rate hits an all-time low at 8.9% LTM
  • Capital Allocation:
    • Interim Dividend per share: `12.00 | Record date 15/10/2020 | Payment date 03/11/2020
    • The Board has approved a proposal to buy back up to 5,33,33,333 equity shares of TCS, being 1.42% of the total paid up equity share capital, at `3,000 per equity share for an aggregate amount not exceeding `16,000 crore (excluding taxes and related expenses),  on proportionate basis under the tender offer route using the stock exchange mechanism, subject to approval of the members by means of a special resolution through a postal ballot.

* Excludes provision of $ 165 Mn towards legal claim

Commenting on the Q2 performance, Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: “Driving accelerated business value realization of our customers’ digital investments has resulted in broad-based revenue growth. The strong order book, a very robust deal pipeline, and continued market share gains give us confidence for the future.”

He added: What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilized to create innovative new business models and differentiated customer experiences. Our investments in building deep expertise on these platforms, in research and innovation and in industry-specific solutions leveraging our contextual knowledge, position us very strongly to benefit fully from this secular demand driver.”

N Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: “Our all-round performance this quarter is a huge endorsement of the increased relevance of our services and solutions to our clients as they pivot from risk mitigation to long-term resilience powered by cloud, digital and simplification of working methods. Clients are partnering us to leverage our thought leadership in SBWS™, Vision 25 x 25™ and Location Independent Agile™ to build a resilient, adaptable and future-proof operating model.”

He added: “Accessibility and Touchless are becoming important attributes for solution design, and our products and platforms continue to gain traction. Besides core systems transformation, our Quartz Blockchain Solution is the choice of a leading bank and a market infrastructure player for inter-bank lending, crypto assets and for enabling real-time settlements.”

V Ramakrishnan, Chief Financial Officer, said: “We have always maintained that growth is the best margin lever, and that is very evident in our numbers this quarter. It is very gratifying to see every financial metric precisely where we would like it to be, with a stellar operating margin despite neutral currency, strong cash conversion, and lowest ever DSO. We continue to invest in our people and are doubling down on building newer capabilities to power the next leg of our growth and market share expansion.”

Q2 Segment Highlights**

Industries:  BFSI (+6.2%), Retail and CPG (+8.8%) and Life Sciences and Healthcare (+6.9%) led the growth. Technology & Services grew 3.1%, Manufacturing +1.4% while Communications & Media de-grew by 2.4%.

Markets: All markets showed good sequential growth, with North America growing 3.6%, UK +3.8%, and Continental Europe +6.1%. Emerging markets also grew well, with India growing 20%, MEA +8%, Latin America +5.5% and Asia Pacific +2.9%.

Services: A surge in future-focused discretionary investments for growth and transformation drove a strong, broad-based rebound in growth across industry verticals and geographies, led by Cloud & Security, Analytics and Cognitive Business Operations.

  • Consulting & Services Integration: With customers looking beyond the pandemic and adapt to the new realities, location independent execution, contactless customer experiences, M&A and consolidation of enterprise group functions are gaining momentum. There was strong growth in enterprise agility, M&A services, and Finance and Shared Services.
  • Cognitive Business Operations: TCS’ Zero Touch model, leveraging AI/ML-enabled process mining for 100% remote execution, saw strong traction and recognition from the market as an industry-leading offering. Growth in CBO was broad-based, led by Intelligent Process Automation, Digital Service Desk, Finance & Supply Chain cognitive operations.
  • Digital Transformation Services: There was strong growth momentum in public and private cloud services, spanning applications, infrastructure migration, modernization, and digital workplace services. Likewise, cybersecurity services such as enterprise vulnerability management, identity and access management and managed Services grew strongly, driven by the need for cyber resilience and a standardized posture across estates.

    Heightened focus on providing enhanced customer experiences on digital channels drove a strong rebound in demand for interactive design, digital marketing and content services. Another area that benefited is data and analytics, especially customer analytics, data estate modernization, and risk,  regulatory and compliance analytics, all of which are critical for product differentiation, business agility, customer segmentation and targeting, and boundaryless collaboration within the enterprise and across ecosystems.

** Growth in QoQ CC

Key Highlights          

  • Albertsons, a leading food and drug retailer in the United States, selected TCS to advance its transformation journey by modernizing and migrating critical mainframe-based legacy systems to a public cloud.
  • Selected as the digital transformation partner to help build a greenfield IT ecosystem for maurices, a women’s fashion-apparel retail chain in the US and Canada. TCS will help maurices strategize, create and operationalize a new secure, future-proof architecture that will drive synergy and agility across its enterprise.
  • TPG Telecom, a full-service telecommunications provider in Australia, selected TCS as its IT Managed Services partner to help achieve its transformational roadmap. The engagement covers Application Managed Services, Infrastructure Services, End User Management Services and Cyber Security Services.
  • Selected by a global electrical appliances company, to transform its global supply chain processes through intelligent planning, leveraging a world-class integrated business planning platform, across multiple countries in Asia Pacific. The objective of this transformation program is to improve efficiency, reliability and resilience in operations.
  • Selected by a US-based multinational food processing company, for the integration of a recent acquisition. TCS is establishing an Integration Management Office to oversee all aspects of the integration including coordinating, managing, allocating resources and reporting on the complex systems associated with each.
  • Selected by a global leader in credit ratings and research, to help enable their aggressive acquisition strategy. TCS will leverage an adaptable integration framework, to support the on-boarding and integration of the acquired entities onto their next generation digital ERP platform. This effort will result in a repeatable framework for all future integrations for greater business agility.
  • Selected by a leading bank headquartered in Australia, to strengthen its risk management frameworks. TCS will facilitate end-to-end traceability of transactions from origination to fulfillment and leverage its AI-powered Smart Quality Engineering platform, to enable faster time to market and higher first time right, in compliance with financial crime and fraud management regulations. TCS will also implement a Financial Assurance Service Platform to drive improvements in the collections process for their retail banking business.
  • Engaged by Travelport, a leading travel and tourism technology company, for transforming the overall customer experience by simplifying the product and technology stack.
  • A global leader in beverages industry has chosen TCS Enterprise Cloud as a part of their next generation hybrid cloud strategy. This will enable a standardized IT solution for all their Global business subsidiaries, bringing in complete transparency and consumption efficiencies.
  • Selected by a financial services company headquartered in the United States, as the strategic partner for the design and development of a wealth management platform on a leading public cloud. This microservices and serverless architecture-based platform will deliver superior customer experience with enterprise-wide, omni-channel, digital collaboration for the client and partner ecosystem.
  • Engaged by a North American healthcare major, to build a microservices based platform leveraging cloud-native technologies to support business growth. The modernized applications will remediate existing vulnerabilities and enable the client to better support patients throughout their wellness journey.
  • Engaged by a North American insurance major, to transform their mainframe-based legacy policy administration system into a modern, microservices-based architecture on a leading cloud hyperscale platform, to reduce technical debt, increase efficiency and ensure quicker response to market volatility for the company.
  • Engaged by a large Nordic insurance company, to modernize and manage their integration platforms. This will make the company more agile and responsive in bringing new products and services much faster to market by integrating in-house applications and back end services rapidly.
  • Selected by one of the largest global gift cards and financial services provider, to provide managed services support for ERP and CRM solutions on a hyperscale cloud platform. TCS will leverage MFDM™ based test automation to improve productivity and customer engagement.
  • Selected by a large global private trading group, to manage its infrastructure and security solutions. The TCS solution, consisting of Cloud Exponence services and Digital Service Desk will accelerate digital adoption, improve agility and increase efficiencies.
  • Selected by Toyota Motors North America, as a strategic partner to transform its IT infrastructure leveraging cognitive operations platform, ignio™ for increased efficiency and superior customer experience.
  • Chosen by a UK retail and financial services major, to streamline its IT landscape and operations. TCS ignio-led automation will help achieve significant operational efficiency gains. TCS has also been chosen as their security partner to achieve increased cyber security resilience in a managed services model.
  • Engaged by a leading British multinational retailer, as transformation partner for HR functions with a leading enterprise cloud suite across all their stores and offices in UK. This transformation will ensure enhanced employee experience, operational efficiency, retention of talent, as well as faster talent acquisition with reduced time to onboard.
  • Engaged by a multinational automotive corporation, for transforming their business process in compliance with NAFTA, onto a leading service cloud platform. The transformation will enable them to fortify risk mitigation and customer retention programs.
  • Chosen by a leading European retail company, to transform the business operations into a next-gen model leveraging TCS MFDM powered by ignio. This will help the customer continually adopt best practices, accelerate time to market and improve efficiency.
  • Selected by a Middle Eastern multinational conglomerate, to transform its Finance & Accounting operations spanning procure to pay, customer to cash, record to report, master data management, financial planning & analysis and payroll services. TCS ignio will be leveraged as part of the engagement for delivering with a Machine First approach.
  • Chosen by a large global pharma company for its digital marketing transformation, leveraging TCS’ expertise in design-led experience transformation.  The TCS solution will streamline its multi-brand, multi-market marketing structure, standardize brand communication in compliance with regulatory requirements, coupled with the flexibility to localize communications across various country operations through digital channels.
  • Selected by a European consumer products company, for the continuous improvement of their global marketing technology landscape. TCS will enable intelligent automation and leverage its Digital Asset Management framework to enable personalization capabilities leading to enhanced user experience.
  • Engaged by a prominent Australian real estate services company, for realizing the value of enterprise content management by bringing together various enterprise systems. TCS will design and implement an industry-leading Information Management solution to enhance user experience, organizational agility and scalability.
  • Selected by a European railway company, as their marketing transformation partner to help personalize the connected customer experience. This partnership will help them achieve growth objectives such as increased customer acquisition and conversion, increased travel frequency, and accelerated digital shift from offline to online channels.
  • Selected by a leading global bank, for its data warehouse modernization program leveraging a leading cloud hyperscale platform, to drive organizational efficiencies across business functions including its international and retail operations and reduce capital expenditure.
  • Selected by a leading European wholesale distributor of groceries, to modernize its data lake leveraging TCS’ DAEzMo™, to drive business insights at scale and stay ahead of the curve. TCS will undertake transformation of their Data & Analytics capabilities to maximize operational efficiency, flexibility, and competitiveness in the areas of recruitment, operations, and supply chain.
  • Chosen by a leading North American bank, as its strategic partner to enhance its data governance and data quality, thereby enabling it to stay agile and respond to fluctuating market demands. The TCS solution, built on the strengths of DATOM™ and ignio, will put in place an integrated data strategy and governance framework. 
  • Selected by a leading US-based travel and financial services firm, to build a financial relief program for the economic downturn for its credit and collections functions. TCS will create a 360-degree customer view for designing contextual programs, thereby improving client’s customer engagement and driving business growth.
  • Selected by a leading American multinational consumer goods corporation, to modernize its existing Product Information Management System, to provide a single place to collect, manage, and enrich product information; standardize product catalog across multiple channels, thereby helping enhance its business operations and take data-driven decisions to stay agile and quickly respond to market demands.
  • Selected by a European retailer, to develop a leading hyperscale cloud-based IoT platform. The enterprise IoT platform will provide a unified view of all IoT applications and operations in real time and enable them to take data-backed business decisions with higher agility.
  • Engaged by a USA-based biotechnology subsidiary of a multinational healthcare company, for their personalized healthcare program leveraging a unique combination of data at scale, advanced analytics and digital technologies for personalized diagnosis, care, treatment access, and monitoring. TCS’ solution will glean insights by mining multiple data sources hosted on a hybrid environment. The solution aims to transform the healthcare provider’s ability to ensure timely and appropriate treatment.
  • Selected by a leading global Automotive OEM headquartered in Asia Pacific, as a design partner for implementing infotainment systems for its electric and hybrid vehicles. TCS has also been selected for their connected car telematics operations and monitoring for multiple vehicles for North America and Europe.
  • Selected by a USA-based global analytical instrumentation manufacturing company for their engineering application maintenance and support services leveraging Agile, cloud-based project lifecycle management platform, in a managed services model. TCS’ dedicated support services will help their engineering business community to work seamlessly from new product introduction to services, and improve overall efficiency.
  • Selected by an American insurance group as the delivery partner to assess all of its agent facing digital web content for compliance to the Web Content Accessibility Guidelines. TCS leveraged its Customer Experience Assurance Platform for automated assessments and its rich contextual knowledge to deliver quick results in agile iterations.
  • Engaged by a global pharmaceutical company headquartered in Japan, as their quality transformation partner. TCS will leverage its TASE and CX Assurance platforms to test ERP systems for improved product quality and faster time to market.

Research and Innovation

  • TCS BaNCS™ was ranked by IBS Intelligence as the #1 best-selling Investment and Fund Management System and among the top two in the Universal Banking and Pure-play Digital Banking category globally in the IBSI Sales League Tables 2020.
  • ignio™, TCS’ closed-loop, autonomous enterprise platform, won the AI Breakthrough Award, 2020, in the category Best Overall AI Platform. An independent panel of AI experts recognized ignio for its advanced machine learning and AI capabilities as well as rapid growth and market leadership.
  • TCS OmniStore™ won the ICX Association’s Elevate award for Best OmniChannel Interactive Customer Experience. TCS’ unified commerce platform was recognized for creating unified journeys using interactive technologies to help retailers create an engaging shopping experience across multiple channels, such as mobile, web, and in-store.
  • As on September 30, 2020, the company has applied for 5,500 patents, including 176 applied during the quarter, and has been granted 1,593 patents.

Human Resources

TCS’ consolidated headcount stood at 453,540 as of September 30, 2020, with a diverse workforce comprising 147 nationalities, and women constituting 36.4% of the base.

TCS’ continued investments in organic talent development, focus on upskilling and innovative training methods have resulted in industry-leading outcomes. TCSers logged in 10.2 Mn learning hours in Q2, a 29% increase over the prior quarter. Over 352,000 employees have been trained on multiple new technologies, and over 427,000 have been trained on Agile methods.

Investments in people, progressive HR policies and an empowering culture have made TCS the global industry benchmark in talent retention. In Q2, its IT services attrition rate (LTM) was at 8.9%, an all time low.

“We want to thank all TCSers for the incredible resilience they have shown during these trying times. We are happy to announce that we will be rolling out salary increases, effective October 1st. We started onboarding freshers, and increased our recruitment globally in Q2, in anticipation of the growth trajectory we see ahead,” said Milind Lakkad, Global Head, Human Resources.

He added: “We continue to focus on the physical and emotional wellbeing of our employees. With increasing caseloads, we are enabling TCSers and our clients to continue working remotely, with our SBWS™ model. To support employees and their families during the pandemic, we have invested in setting up medical helplines, ambulance services and first-line COVID isolation centers within TCS premises at 11 cities across the country. We have also ramped up our employee engagement and outreach. Our OneTCS channel has hosted inspirational leaders, mental health experts, virtual town halls and global talent hunt competitions, all designed to reduce stress and the feeling of isolation, and to boost morale. We are also providing self-help and counseling services which were availed by nearly 8,000 TCSers in Q2.” 

Awards and Recognition

Business Leadership:

  • Won two Stevies® at the seventh annual Asia-Pacific Stevie® Awards,  a Silver Stevie in the Innovation in Entertainment Apps category for its Standard Chartered Singapore Marathon 2019 Official Race App, and a Bronze Stevie in the Excellence in Innovation in Technology Industries category for driving growth and transformation through technological excellence and innovation within TCS.
  • Awarded 18 Stevies® at the 2020 Great Employers Awards; six Gold Stevies, eight Silver Stevies and four Bronze Stevies in recognition of TCS’ talent management, CSR and business practices that have helped it attract retain the best talent to build a global, diverse workforce, and a vibrant workplace.
  • Won four Stevies® at the 2020 International Business Awards; two Gold Stevies in the categories ‘IT Department of the Year‘ and ‘Mobile Site & App – Sports‘; a Silver Stevie for TCS Optumera™ in the category ‘Artificial Intelligence/Machine Learning Solution‘, and a Bronze Stevie for the ‘Most Exemplary Employer‘.
  • Won three awards for talent management and excellence in learning at the 2020 Brandon Hall Group Awards; two Gold awards for ‘Best Advance in Creating a Talent Strategy‘ and ‘Best Learning Program Supporting a Change Transformation Business Strategy‘ and a Silver award in the category ‘Best Use of Games and Simulations for Learning‘.
  • Digitate, a software venture of TCS, was ranked #37 among the Top 100 Software Companies of 2020 by The Software Report, recognized for the rapid growth and market leadership of its ignio suite within five years of launch.


  • Awarded the 2020 Canada IMPACT Award for Datacenter Migration by Microsoft Corporation for driving strong business outcomes for its customers, including enhanced security, increased agility, more resiliency, strong TCO benefits and improved governance through both repeatable solutions and transformational wins.
  • Recognized by Amazon Web Services (AWS) as the 2020 AWS Migration Success Partner of the Year in India, for TCS’ commitment to excellence in helping customers successfully migrate and manage their core applications on the cloud.


  • Dr Sundeep Oberoi, Global Head – Cybersecurity Services, was re-elected as Chairperson, ISO SC7, the group responsible for over 200 ISO standards governing processes and supporting tools and technologies for the engineering of software products and systems.
  • Dr Anand Kumar, Principal Scientist, has been nominated as Chair of the INCOSE Architecture Working Group from Jan 2021 and also as Chair for the India Agile Standards at the Bureau of Indian Standards.
  • Dr Harrick Vin, Chief Services Innovation Officer and Dr Sharmila S Mande, Distinguished Chief Scientist, have been elected as Fellows of the Indian National Academy of Engineering
  • Karthik Kumar, Global Head – Mortgage Practice, BFSI Business Group, was honored with the 2020 HousingWire Vanguard Award for helping drive digital transformation and the adoption of cognitive technologies in the home lending industry.

IFRS Financial Statements

Consolidated Statements of Comprehensive Income

For the three-month periods ended September 30, 2019, and September 30, 2020

(In millions of $, except per share data)

period ended
September 30, 2019

Three-month period ended

September 30, 2020

Ex Adj*






Cost of revenue




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SG & A expenses




Operating income




Other income (expense), net




Income before income taxes




Income taxes




Income after income taxes




Non-controlling interests




Net income




Earnings per share in $




Consolidated Statements of Financial Position

As of March 31, 2020, and September 30, 2020

(In millions of $)

As of March 31,


As of September 30,


Property and equipment



Right-of-use Assets



Intangible assets and Goodwill



Accounts Receivable



Unbilled Revenues






Cash and Cash equivalents



Other current assets



Other non-current assets



Total Assets



Liabilities and Shareholders’ Equity

Shareholders’ Funds



Other current liabilities



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Non-controlling interests



Total Liabilities



*excludes legal claim provision (refer note 19 to Financial Statements)

About Tata Consultancy Services Ltd (TCS)

Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent AgileTM delivery model, recognized as a benchmark of excellence in software development.

A part of the Tata group, India’s largest multinational business group, TCS has over 453,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $22 billion in the fiscal year ended March 31, 2020, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS’ proactive stance on climate change and award-winning work with communities across the world have earned it a place in leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at

To stay up-to-date on TCS global news, follow @TCS_News.

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SOURCE Tata Consultancy Services

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