Tata Consultancy Services Limited · NSE:TCS
Tata Consultancy Services — India Conference – Shaping the Future (August 2005)
38 slides from Tata Consultancy Services's conference presentation, Aug 1, 2005
Slide 1: TATA Consultancy Services
TATA Consultancy Services Presentation by S. Mahalingam Chief Financial Officer At the India Conference – Shaping the Future Presented by Motilal Oswal Securities and Bear Stearns August 01, 2005 © Tata Consultancy Services ltd. May 16-17, 2005 1
Slide 2: Disclaimer
Disclaimer Certain statements in this release concerning our future growth prospects are forward- looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties rel
Slide 3: Overview
Overview Established in 1968 Over 48,000 Associates FY 2005 revenue of USD 2.24 bln First Company in the world to receive an integrated Enterprise wide CMMI Level 5 and PCMM Level 5 assessment Global presence – Operations in 47 countries, 156 offices across the globe First and Largest y
Slide 4: Revenue
Revenue TCS is the first company to cross USD 2Bn in revenue 2.5 2 1.5 USD Bn 1 0.5 0 Revenue USD Bn FY 01 FY 02 FY 03 FY 04 FY 05 4
Slide 5: Lineage: The Tata Group
Lineage:The Tata Group India’s Largest Conglomerate Represents Excellence & Integrity Trusteeship Concept Pioneering Spirit Leaders in many Businesses Group turnover in 2003-2004 of USD 14.25 billion Over 220k employees, 2 million shareholders India’s largest (private sector) Market
Slide 6: Businesses We Serve
Businesses We Serve Banking Insurance Government Telecom Transportation TCS Manufacturing Energy and Utilities Financial Services Life Sciences and Healthcare Media and Entertainment Retail and Consumer Goods Unmatched Breadth and Depth in Business Space 6
Slide 7: Our Business: End-to-End IT Consulting and Services
Our Business: End-to-End IT Consulting and Services Consulting Asset Based Offerings Technology Services Products IT Consulting Embedded Systems Product-based Services Domain Consulting R&D Services Core IT Services Custom Applications Packaged Software Implementation Application Outsourcing Systems
Slide 8: Our Products
Our Products Manufacturing Utilities Life Science and HealthCare CemPac En’rgise Tata HMS Factore SmartClinic Tools Accounting MasterCraft Network Custodial Service Assent Infrex DataClean TCS E.X. Next Generation 1.5 E. X. Personal Investment Manager E.X. Personal Accoun
Slide 9: Truly Global Presence
Truly Global Presence 156 Offices in 34 countries 33 Delivery Centres in 10 countries Europe UK & Ireland N. America 18 1 8 1 51 10 India 59 15 Others Americas ME & Africa India APAC 6% 59% Iberoamerica 12% 4 - 7 3 9 3 Europe 23% Global Sales Office Revenue Mix by Geography(1) Global Delivery Center
Slide 10: Multi-Dimensional Growth Strategy
Multi-Dimensional Growth Strategy Leverage global presence to win large deals Partnerships & alliance approach for project wins Build and leverage assets to penetrate more customers Leverage Indian experience in global engagements Expand into new geographies Focus on emerging growth engi
Slide 11: Results for Quarter I FY 2005-06
Results for Quarter I FY 2005-06 © Tata Consultancy Services ltd. May 16-17, 2005 11
Slide 12: Highlights for Q1 2005-06: Strong International Revenues drive TCS Growth
Highlights for Q1 2005-06: Strong International Revenues drive TCS Growth US GAAP USD Millions Rs. Millions Y-on-Y Q-on-Q Revenues International Revenues 550.06 23,933 27.63% 5.47% Indian Revenues 72.65 3,161 22.46% 0.25% Total Revenues 622.71 27,094 27.00% 4.83% Operating Income 170.50 7,419 23.88%
Slide 13: US GAAP Income Statement
US GAAP Income Statement Consolidated US GAAP USD Million Rs Million Q1 FY06 Q1 FY06 Q4 FY05 Q3 FY05 Q2 FY05 Q1 FY05 Revenue 622.71 27,094.31 25,845.55 25,784.35 24,307.27 21,335.20 Cost of revenue 321.85 14,003.88 13,682.40 13,564.95 13,400.14 11,569.27 Gross margin 300.86 13,090.43 12,163.15 12,21
Slide 14: Common size Financial Statement
Common size Financial Statement Consolidated US GAAP (% of Revenue) Q1 FY06 Q4 FY05 Q3 FY05 Q2 FY05 Q1 FY05 Revenue 100.00 100.00 100.00 100.00 100.00 Cost of revenue 51.69 52.94 52.61 55.13 54.23 Gross margin 48.31 47.06 47.39 44.87 45.77 SG & A expenses 20.93 20.71 18.86 17.01 17.70 Operating inco
Slide 15: COR – SG&A Details
COR – SG&A Details COR (Rs Million) Q1 FY 06 Q4 FY 05 Q3 FY 05 Q2 FY 05 Q1 FY 05 Employee Cost 11,122.34 10,569.57 10,963.49 10,927.09 9,445.97 Equipment & Software 1,101.83 1,588.54 1,162.91 1,224.51 1,028.38 Depreciation 382.82 358.44 289.12 239.72 224.41 Travel 627.11 481.57 489.46 518.59 433.56
Slide 16: Common size COR & SG&A
Common size COR & SG&A COR (% of Revenue) Q1 FY 06 Q4 FY 05 Q3 FY 05 Q2 FY 05 Q1 FY 05 Employee Cost 41.05 40.90 42.52 44.95 44.27 Equipment & Software 4.07 6.15 4.51 5.04 4.82 Depreciation 1.41 1.39 1.12 0.99 1.05 Travel 2.31 1.86 1.90 2.13 2.03 Communication 0.83 1.07 0.82 0.76 0.64 Other Costs 2.
Slide 17: US GAAP Balance Sheet
US GAAP Balance Sheet Consolidated US GAAP 30-June-2005 31-March-2005 Rs Million % Rs Million % Source of Funds Shareholders Funds 38,107.15 66.43 31,977.31 65.38 Long term debt - - - - Short term borrowings 1,415.49 2.47 1,927.80 3.94 Current liabilities 15,994.41 27.88 13,196.49 26.98 Minority Int
Slide 18: Operational Performance
Operational Performance © Tata Consultancy Services ltd. May 16-17, 2005 18
Slide 19: Growth by Market
Growth by Market TCS acquired new customers 5.8% in all geographies during the 11.7% Americas quarter. Europe US and Continental Europe India 23.5% have registered strong growth 59.0% Others during the quarter In addition to growth in our Geography % Q1 FY 2006 Q4 FY 2005 traditional markets o
Slide 20: Growth by Domain
Growth by Domain 9% 2% BFSI TCS is experiencing growth 4% Manufacturing across verticals. The deals are 7% 41% Telecom well spread across our Life Sciences & Healthcare services portfolio from 5% Retail & Distribution application management to Transportation BPO. Energy & Utilities 15% Others BF
Slide 21: Growth by Service Line
Growth by Service Line The IT Services business derived 3% 3% growth from both the existing clients as well as new clients. 22% The company’s strategy to create new growth engines by focusing on six major service areas is gaining good momentum – Five 72% deals in BPO, Eight each in EIS and Infra
Slide 22: Operational Parameters
Operational Parameters • With one of our large customers, the rate structure has changed from a blended Revenue % Q1 FY 2006 Q4 FY 2005 rate model to specific onsite/offshore rate model. This Delivery Location* has affected the onsite:offshore Onsite 63.20 60.11 revenue mix to the extent of 1% Offsh
Slide 23: Client Parameters
Client Parameters Q1 FY 2006 Q4 FY 2005 Clients Contribution * Revenue % Top 1 5.00 5.14 Top 5 18.20 19.26 Top 10 29.20 30.49 US$ 1 mln Clients 219 214 US$ 5 mln Clients 79 76 US$ 10 mln Clients 45 42 US$ 20 mln Clients 27 25 US$ 50 mln Clients 5 5 * LTM The revenues from GE contributed to 13.10 % o
Slide 24: Client Acquisition and Expansion
Client Acquisition and Expansion Particulars Q1 FY 2006 Q4 FY 2005 Active Clients 553 516 New Clients 68 53 Revenue % from Repeat Business 98.50 92.75 Revenue % from New Business 1.50 7.25 24
Slide 25: Operational Performance – Profiles of 'Select' Growth Engines
Operational Performance – Profiles of ‘Select’ Growth Engines © Tata Consultancy Services ltd. May 16-17, 2005 25
Slide 26: Profiles - BPO
Profiles - BPO TCS’ strategy of platform-led transaction processing BPO gains market acceptance. 39 active customers with 10 of them $1m+ customers 1906 Employees as of Q1. Revenue of US$ 22 million during FY05 and is projected to grow more than 100% during FY06 5 new deals during Q1 and t
Slide 27: Assurance Services
Assurance Services Integrated end-to-end Assurance Service covering strategy, automation and execution. TCS leverages testing tools developed by TCS R&D in addition to third party products from vendors like Mercury Interactive. The practice contributed about $100 million during FY05 and is exp
Slide 28: Consulting Services
Consulting Services Achieved strong credibility in Business Change Management, IT Strategy Consulting, Technology Consulting and Operations Consulting Enhanced our consulting portfolio with offerings in Process, Security and Governance space Inducted senior, experienced international consultin
Slide 29: Enterprise Solutions & Package Implementation
Enterprise Solutions & Package Implementation By far the largest India based provider of Enterprise Solutions and Package Implementation, with multiple sub-practices each with over $100m in Revenues Strong 31% growth during FY05 Over 450 Clients. More than 100 clients added in Q1 Key wins du
Slide 30: Engineering & Industrial Services
Engineering & Industrial Services Full spectrum of engineering services and solutions - Product Development, Plant Design, Plant Automation, Electronics and Embedded Systems and Enterprise Asset Management More than 250 active clients. Added 21 new clients in Q1 The practice achieved a 40% gro
Slide 31: IT Infrastructure Services
IT Infrastructure Services Integrated remote management of applications and infrastructure. The practice serves 100 clients including 31 global 500 clients. Six new global 500 clients were added during Q1. The practice has the ability to deliver complex engagements. A Fortune 500 metals major
Slide 32: Human Resources
Human Resources © Tata Consultancy Services ltd. May 16-17, 2005 32
Slide 33: Employee Growth
Employee Growth 50000 45714 40000 30121 Number of Employees 30000 24168 19000 16800 * 20000 14300 * * 10000 People 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 * Approximate Figures 33
Slide 34: Total Employees – TCS, Indian & Overseas Subsidiaries
Total Employees – TCS, Indian & Overseas Subsidiaries At the end of Q1–06, • Total associates in TCS and its Indian subsidiaries was 48,711. Of this TCS was 43,682 and CMC,AFS,ASDC,PGS and WTI was 5,029. • 56% of TCS associates have greater than 3 years experience. • Women associates comprised 21% o
Slide 35: Employee Additions and Attrition
Employee Additions and Attrition During Q1 – 06, We added 3,913 associates in TCS, comprising 3,523 associates in India and 390 overseas. In India, we added 1,745 Trainees & 1,778 Experienced Professionals. We added 109 associates in our GDCs. There has been a net addition of 2,690 associate
Slide 36: Truly Global – International Recruiting & Compensation Restructuring
Truly Global – International Recruiting & Compensation Restructuring We had a total of 1,631 non Indian nationals as compared to 1,448 in Q4- 05, constituting 3.7% of our associate base. The average increase in annual compensation was 11% in India and 4% in overseas geographies. We are moving
Slide 37: Vision, Mission and Values
Vision, Mission and Values Vision Global Top 10 by 2010 Mission To help Customers achieve their business objectives, by providing Innovative, Best-in-class Consulting, IT solutions and services. We shall make it a joy for all stakeholders to work with us. Values Integrity, Leading change, Excellence
Slide 38: Discussions
Discussions For further information please contact: Arjun C Marphatia Head Investor Relations arjun.marphatia@tcs.com 38
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