Tata Consultancy Services Limited · NSE:TCS
Tata Consultancy Services — Q2 FY2007 Earnings Presentation
36 slides from Tata Consultancy Services's earnings presentation, Oct 16, 2006
Slide 1: Results for Quarter II FY 2006-07
Results for Quarter II FY 2006-07 © Tata Consultancy Services ltd. 16 October 2006 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: Highlights
Highlights Strong quarter with an all-around performance y 10.81% Q-on-Q Revenue growth in International business y 3% improvement in EBIDTA margin on Q-on-Q basis y 14.95% Q-on-Q growth at Net Income level International Revenues surges by 50.86% on Y-o-Y basis Very strong demand environment y
Slide 4: Financial Performance
Financial Performance Economic Times Awards 2006 – Company of the Year © Tata Consultancy Services ltd. 16 October 2006 4
Slide 5: Indian GAAP Growth Summary
Indian GAAP Growth Summary Consolidated Indian GAAP (Rs. Crores) Q2 FY07 Q1 FY07 Q2 FY06 Income from IT & Consultancy Services 4,301 3,914 2,921 % Growth Q-o-Q 9.88% % Growth Y-o-Y 47.25% Total Income 4,495 4,155 3,156 % Growth Q-o-Q 8.18% % Growth Y-o-Y 42.43% PBIDT (before Other Income) 1,252 1,03
Slide 6: Indian GAAP Income Statement – Consolidated
Indian GAAP Income Statement – Consolidated Rs. Crores % of Total Income Consolidated Indian GAAP Q2 FY07 Q1 FY07 Q2 FY06 Q2 FY07 Q1 FY07 Q2 FY06 INCOME a) IT & Consultancy Services 4,300.75 3,914.20 2,920.72 95.68 94.21 92.55 b) Manufacturing, Sale of equipment and Licences 194.08 240.65 235.10 4.3
Slide 7: Indian GAAP Income Statement – Unconsolidated
Indian GAAP Income Statement – Unconsolidated Rs. Crores % of Total Income Unconsolidated Indian GAAP Q2 FY07 Q1 FY07 Q2 FY06 Q2 FY07 Q1 FY07 Q2 FY06 INCOME a) IT & Consultancy Services 3,536.55 3,198.18 2,487.51 96.51 95.15 91.22 b) Manufacturing, Sale of equipment and licences 127.92 162.94 239.37
Slide 8: Indian GAAP Balance Sheet - Consolidated
Indian GAAP Balance Sheet - Consolidated Rs Crores % Consolidated Indian GAAP 30-Sep-06 31-Mar-06 30-Sep-06 31-Mar-06 Source of Funds Shareholders' Funds 7,332.80 5,998.81 96.42 95.16 Minority Interest 168.68 164.72 2.22 2.61 Loan Funds 97.47 116.69 1.28 1.86 Deferred Tax Liability 6.50 23.57 0.08 0
Slide 9: US GAAP Revenue Growth
US GAAP Revenue Growth Consolidated US GAAP (Rs Millions) Q2 FY07 Q1 FY07 Q2 FY06 Revenue from International Business 41,064 37,059 27,220 % Growth Q-o-Q 10.81% % Growth Y-o-Y 50.86% Revenue from Indian Business 3,758 4,384 4,346 % Growth Q-o-Q -14.28% % Growth Y-o-Y -13.53% Total Revenue 44,822 41,
Slide 10: US GAAP Growth Summary
US GAAP Growth Summary Consolidated US GAAP (Rs Millions) Q2 FY07 Q1 FY07 Q2 FY06 Gross Margin 20,335 17,864 14,291 % Growth Q-o-Q 13.83% % Growth Y-o-Y 42.29% EBIDTA 12,294 10,128 8,790 % Growth Q-o-Q 21.39% % Growth Y-o-Y 39.87% Operating Income 11,336 9,265 8,165 % Growth Q-o-Q 22.36% % Growth Y-
Slide 11: US GAAP Income Statement
US GAAP Income Statement USD Millions Rs Millions % of Revenue Consolidated US GAAP Q2 FY07 Q2 FY07 Q1 FY07 Q2 FY06 Q2 FY07 Q1 FY07 Q2 FY06 Revenue 975.43 44,821.76 41,443.32 31,566.47 100.00 100.00 100.00 Cost of revenue 532.88 24,486.56 23,579.47 17,275.02 54.63 56.90 54.73 Gross margin 442.55 20,
Slide 12: COR – SG&A Details
COR – SG&A Details Rs. Millions % of Revenue COR Q2 FY07 Q1 FY07 Q2 FY06 Q2 FY07 Q1 FY07 Q2 FY06 Employee Cost 19,913.48 18,907.54 13,081.81 44.43 45.62 41.44 Equipment & Software 1,717.60 1,884.15 2,235.63 3.83 4.55 7.08 Depreciation 606.42 590.82 435.20 1.35 1.43 1.38 Travel 543.01 546.62 576.88 1
Slide 13: US GAAP Balance Sheet
US GAAP Balance Sheet 30-Sep-06 31-Mar-06 Consolidated US GAAP Rs Millions % Rs Millions % Assets Cash and Cash equivalents 5,929.57 5.58 3,965.01 4.63 Accounts Receivable 38,405.97 36.17 32,789.78 38.29 Unbilled Revenues 7,147.60 6.73 4,712.30 5.50 Other Current assets 10,550.28 9.94 8,133.15 9.50
Slide 14: Operational Performance
Operational Performance © Tata Consultancy Services ltd. 16 October 2006 14
Slide 15: Growth by Market
Growth by Market 4.6% 1.5% 8.4% • In North America, we experienced an North America excellent growth from our existing clients Ibero America 7.8% in addition to significant shift towards 53.5% UK offshore (over 300 bps). Continental Europe • UK continued its strong growth momentum India with strong
Slide 16: Growth by Domain
Growth by Domain 8.7% BFSI • Ramp-ups continued with a number of 2.7% 3.4% Manufacturing Banking and Insurance clients during the 6.6% 42.7% Telecom quarter. In addition, TCS’ Financial Services Life Sciences & Healthcare product solutions were selected by several 4.0% Retail & Distribution Institut
Slide 17: Growth by Service Line
Growth by Service Line 2.4% 5.8% Application Development & Maint. • TCS’ Full Services capabilities is driving 2.5% 3.5% Business Intelligence growth with its large customers – Engineering & Industrial Services Business Intelligence solutions, 12.0% Infrastructure Services Consulting, Infrastructure
Slide 18: Operational Parameters
Operational Parameters • Significant shift to offshore, particularly from the large North American clients Q2 FY07 Q1 FY07 was achieved in this quarter. Revenue % Delivery Location* • The TCS Global Network Delivery model is being rapidly adopted by Onsite 56.0 58.7 clients. Several of TCS’ global c
Slide 19: Client Parameters
Client Parameters Client Concentration Q2 FY07 Q1 FY07 Clients Contribution * Revenue % Top 1 4.9 4.0 Top 5 16.8 16.7 Top 10 26.8 26.8 US$ 1 mln Clients 274 258 US$ 5 mln Clients 105 97 US$ 10 mln Clients 70 65 US$ 20 mln Clients 32 33 US$ 50 mln Clients 15 10 * Last Twelve Months 19
Slide 20: Client Acquisition and Expansion
Client Acquisition and Expansion Particulars Q2 FY07 Q1 FY07 Active Clients 742 764 New Clients 58 62 Revenue % from Repeat Business 97.9 98.8 Revenue % from New Business 2.1 1.2 20
Slide 21: Client and Delivery Highlights
Client and Delivery Highlights TCS successfully delivered a mortgage and lending system for a leading North American Bank meeting the “co-borrower” regulatory requirements. TCS successfully delivered a 100 person year, Loan Acquisition platform to cater to all loan products for a leading North A
Slide 22: Representative Wins
Representative Wins A Financial Services regulatory authority in Europe selected TCS as their partner for their transformation program. Another leading investment bank has engaged TCS for carrying out MiFID assessment and compliance One of North America’s leading Insurance players awarded TCS wi
Slide 23: Representative Wins
Representative Wins A leading Media & Entertainment company in the UK selected TCS as SI partner for key business growth segments including Content Management, Digital Delivery and Wholesale Line Rental. A leading Pharma Retailer in Europe has selected TCS as a partner for providing end to end a
Slide 24: Profiles of 'Select' Growth Engines
Golden Peacock National Training Award 2006 Profiles of ‘Select’ Growth Engines © Tata Consultancy Services ltd. 16 October 2006 24
Slide 25: BPO
BPO TCS has acquired 3 new clients including 2 Fortune 500 customers during Q2. A leading US manufacturer selected TCS as its strategic BPO partner. TCS will implement a multi-phased transition plan covering F&A, customer service and supply chain. A leading US financial data services company s
Slide 26: Engineering & Industrial Services (EIS)
Engineering & Industrial Services (EIS) EIS Practice added 20 international clients and maintained a steady growth in Q2. TCS China delivery center has been integrated to offer seamless EIS delivery, and currently serves 3 of our Fortune 500 customers TCS’ joint solution offering with SAP in t
Slide 27: IT Infrastructure Services
IT Infrastructure Services IT infrastructure is gaining traction across TCS’ existing customers, with an addition of 21 new clients in Q2 As part of Global Network Delivery Model, TCS Hungary delivery center has been enhanced for Infrastructure Services delivery. Key Engagements One of the w
Slide 28: Assurance Services
Assurance Services Assurance services continues to increase penetration among the TCS client base, adding 6 new clients in this quarter. TCS continued to increase its portfolio of differentiated testing solutions with the launch of Test Environment Definition and Build services. Key Engagement
Slide 29: Global Consulting Practice
Global Consulting Practice TCS Global Consulting Practice (GCP) registered significant wins and enjoyed strong growth, adding 26 new clients during Q2. Key Engagements TCS developed an e-commerce process and technology strategy to increase market share for one of the world’s leading cell phone
Slide 30: Asset Leveraged Solutions
Asset Leveraged Solutions Our Capital Markets Solutions gained significant wins in Q2 Quartz y A leading European bank selected Quartz as the base for their prime brokerage operations. y QUARTZ selected as the platform of choice by a large custodian bank in the Middle East. y A major South African
Slide 31: Human Resources
TCS awarded DQ-IDC “Best IT Employer” in 2006 for the 3rd Consecutive Year Human Resources © Tata Consultancy Services ltd. 16 October 2006 31
Slide 32: Total Employee Base: 78,028
Total Employee Base: 78,028 No. of TCS Employees: 3,835 74,193 (including 4,928 in 3,660 Corporate Functions) 3,736 74,193 No. of Employees in 67,530 Overseas Subsidiaries and Branches : 6,253 52,575 No. of Employees with Q2-06 Q1-07 Q2-07 Indian subsidiaries (CMC, Associates in TCS Ltd Associ
Slide 33: Gross additions 8,919 Net additions 6,663
Gross additions 8,919 Net additions 6,663 •Total additions in Q2: • 3,764 Trainees in India • 4,200 Laterals in India 8,919 (Highest No. in One Qtr) • 955 employees in Overseas 7,095 6,663 Subsidiaries and Branches 5,788 4,698 • Utilisation Rate: 4,238 •79.4% (excluding trainees) •75.24% (including
Slide 34: Truly Global Workforce
Truly Global Workforce Global/Regional Delivery Center strength: 2,343 % of Non-Indian nationals: 8.3% Employees from across 60 nationalities 25% of our workforce comprises women 48% of employees have over 3 years experience Australian, Others, 13% 4% Uruguayan, American, 9% 10% Brazilian,
Slide 35: Industry Recognition
Industry Recognition Global y 2006 ASTD BEST Awards demonstrating enterprise-wide success through employee learning and development IT Industry in India y No. 1 Employer in IT in DQ – IDC Survey for the 3rd consecutive year. Across Industry in India y 2006 Winner of Golden Peacock National Tra
Slide 36: Thank You!
Thank You! 36 TATA CONSULTANCY SERVICES
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