Highlights of the Q2 concall:
OPM improved by 170 basis points q-o-q, driven by 50 bps gain on account of favourable Forex and 120 bps savings in operating cost and SG&A efficiencies.
Strong, broadbased client metrics this quarter demonstrates increasing success with newer customers.
Large deal wins this quarter, a good pipeline, and bottoming out of the Retail sector softness positions it well.
TCS continues to gain share in the fast growing Digital spend of customers, evident in its industry-leading Digital growth in Q2.
Digital business grew 5.9% qoq, accounting for 19.7% of revenue. The traction on TTM basis at 26% is at par with previous year’s growth rate.
TCS is confident of sustaining the momentum as it has the largest Digital workforce of 2 lakh+ and broad set of competencies.
The fear of ‘Fintech’ has receded among BFS clients. BFS clients have completed one wave of digital investments and are evaluating digital investment options for the journey ahead.
Except Retail and CMI, all industry verticals grew above the company average, led by Travel & Hospitality (up 8% qoq), Energy & Utilities (up 7.2% qoq) and Life Sciences & Healthcare (up 3.6% qoq).
On a y-o-y basis, all industry verticals – with the exception of BFSI and Retail – grew above 9.5%.
The reorganized service lines successfully completed their transition in Q2, and are experiencing strong demand in their respective domains.
Geographically, growth was led by Europe which grew 5.3% qoq, Latin America (up 5.7% qoq), APAC (up 3% qoq) and UK (up 2.5% qoq).
North America grew 1.4% qoq with continued softness in Banking and Retail.
Newly launched strategic offerings which combine consulting and multiple service lines saw more than 10 major wins in Q2 across Enterprise Agility, M&A, Global Shared Services, Supply Chain and Front Office Customer Experience Transformations.
The company is close to announcing a $50 million kind of deal in the IoT space. It is getting into deals that are substantial.
It maintained operating margin forecast for financial year 2018. It expects OPM in the range of 26-28% for FY 2018.
TCS won 11 large deals, including 5 in North America, 3 in APAC, 2 in Continental Europe and 1 in the UK.
TCS added 1 client in USD 100 million categories, 6 clients each in USD 50 million, USD 20 million and USD 10 million bands and 28 clients in USD 1 million categories
Total employee strength at the end of Q2 stood at 389,213 on a consolidated basis, with gross addition of 15,868 employees and net addition of 3,404 employees during the quarter.
The company continues to enjoy best in class employee retention rates. The IT attrition rate (LTM) fell by 0.3% in Q2 to 11.3%, while the total attrition rate (including BPS) fell to 12.1%.
Cash from Operations stood at Rs 5,809 crore. It was 90.1% of Net Income
Travel & Hospitality grew by 8% qoq QoQ, Energy & Utilities rose 7.2% qoq and Life Sciences was up 3.6% qoq.