TCS ahead of peers in incremental revenue

Apr 20 2014, 04:09 IST
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SummaryTCS in the last four financial years has consistently maintained high growth rates in the $86-billion Indian IT industry

Tata Consultancy Services (TCS), India’s largest IT services exporter, on an average added more than $1.5 billion of incremental revenue to its topline in each of the last four fiscal years, when compared with its peers Infosys and Wipro, whose addition have been below $1 billion, revealing the widening gap between these companies.

TCS in the last four financial years has consistently maintained high growth rates in the $86-billion Indian IT industry, setting a kind of benchmark for other companies. In contrast, the other two competitors — Infosys and Wipro — have not been able to keep up the pace largely due to internal issues within their organisations.

In the recent financial results for FY14, TCS reported consolidated revenue of $13.44 billion as against $11.56 billion in FY13, which is an incremental revenue addition of $1.8 billion.

In comparison, during the same period, Infosys added $850 million and Wipro $400 million. At the end of 2014 fiscal, TCS recorded an annual growth rate of 16.2%, while it was 11.5% for Infosys and 6.4% for Wipro.

For the current fiscal, TCS has already stated that it would be growing much higher than the Nasscom projection of 13-15% for the industry, while Infosys has guided to a revenue growth of 7-9%.

On the reasons for the high performance of TCS, Pradeep Mukherjee, president, Avasant, an offshore IT advisory firm, said, “Given the DNA of various companies, TCS has the most balanced one that allows it to compete against the global technology MNCs.”

He felt that for most Indian IT services, companies have certain major chinks in their armour, which has not been the case with TCS, which has got both the breadth and depth.

For many industry executives from competing companies, it is also puzzling how TCS is able to maintain this growth rate given their revenue size and an employee base that has crossed over three lakh.

A senior executive from a TCS rival firm said on condition of anonymity, “Hats off to them for their performance, they are on a roll. They have got their act together.”

For many industry watchers, the driving force behind TCS’ sustained growth has been its chief executive officer and managing director N Chandrasekaran, who took over this role in October 2009.

Under his tenure, TCS has been setting new benchmarks, which also saw it overtaking nearest competitor Infosys on many counts like net profit and operating profit margins. At one point

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