TCS can move revenue & margin: COO
The order book for TCS is at an all-time high, almost turning $7 billion. How does one understand the order book momentum in terms of growth? Will it be double digit or is what we have seen in the last couple of quarters more like a sugar rush due to Covid?
In the last few quarters, we have been delivering a total contract of about $6 billion consistently. I will attribute this to proactive investments, innovative and market leading offerings. It is also an endorsement or an indication of the relative competitiveness that we have in the marketplace.
Overall, we are pleased that in this particular quarter, almost every unit of ours, including all the geographies and products and platforms, have shown growth. Not only have they grown, there has also been broad-based deal wins. Out of $6.8 billion, BFSI has contributed about $2.6 billion. North America has done $4 billion. Overall, we are very pleased with the momentum that we have both on the sales side as well as on the deal wins and the execution side.
The fundamental to this is the fact that the investments that we have made — the vision that Rajesh put about four years ago that we got to become an enterprise agile company by 2020 — I am pleased to say that we celebrated it in a small way for the accomplishment of our enterprise journey which is the core of our SBWS. We talked about the underestimation of human potential, human mindset earlier, but it has been a fantastic journey to see how people react, how people align, how people really collaborate. It is in our DNA but then to see it in action starting from basics sometime in March has been truly remarkable and rewarding.
2020 was a year where collaboration happened. Will 2021 be a year of a different kind of a growth for TCS on margin expansion and big productivity gains?
There is hope that with vaccinations, life will normalise. I believe that the vision that we have set out in terms of the 25×25 operating model will play out and we are hoping that we will have some of the staff coming back to offices. Overall, with the deal momentum that we have, there is a significant opportunity for us to leapfrog that. There is significant opportunity in terms of the multi-year investment cycle. It is a significant opportunity to move both in terms of revenue as well as margin expansion.
When you say you expect margins to leapfrog, does that mean on a 26%, you expect margins to move substantially higher?
I think so. We are in a place where we are happy. We will have a good exit rate and we feel reasonably confident that we will achieve a double digit growth for the coming financial year. All augurs well for TCS, that is number one. Two, the recent investments that we have made in terms of forming that distinctive cloud units for all the hyperscalers plus the launch of that CogniX platform which is actually bringing in multiple technologies together. We always talked about IT-BPS synergy. CogniX makes it a reality and it will drive productivity, self-dealing, self-learning and that augurs well for growth, efficiency and innovation.
There are two ways a company or a business grows: one, the market share or the addressable market share increases and you start gaining more market share from competition. What is the likely scenario for TCS — both or the first?
Going after new markets as well as protecting our market share and increasing our share in the existing segments that we play — both are conscious strategies and conscious operational metrics on which every one of our client partners, account managers and business heads work on and continue to deliver.
I am pleased to say that we always maintain about 1,000 clients. We have increased market share in the last four quarters. We share a wallet in each one of these and also participate in the opportunities whether it is efficiency based or whether it is growth and transmission based. The twin engines positioning that we have gone to market with is something that is very unique coupled with all the products that we have put on the shelf — be it cloud, digital or analytics.
We have consistently gone after creating products and platforms and then see how we can create stickiness over the long term — be it the insurance platform that we talked about, the retirement services or the payment side of it. The core banking cloud that we talked about, each one of them is taking and products like ignio, CogniX and few others are creating a beautiful entry strategy for us. I have a crowded list of vendors. I do not want to have one more in TCS. TCS will stay out and when we go and show them a differentiation in our products, they say come on in. There are multiple angles in which we attack this particular factor of gaining market share and going after new clients and new markets.