Tata Consultancy Services Limited · NSE:TCS

Tata Consultancy Services — Investor Day (February 2008)

14 slides from Tata Consultancy Services's investor day presentation, Feb 12, 2008

  1. Slide 1: Leading in Challenging Times: Sustaining Profitable Growth

    Leading in Challenging Times Sustaining Profitable Growth S Mahalingam Chief Financial Officer & Executive Director Analyst Day, Mumbai 12 February 2008

  2. Slide 2: Top Investor Concerns

    Top Investor Concerns • Sustaining Growth – US economic outlook • Maintaining Profitability – Salary inflation – Rupee appreciation – Funding investments for future growth -1-

  3. Slide 3: Sustaining Growth - Changing Profile of TCS' Business: Revenue by Geography

    Sustaining Growth - Changing Profile of TCS’ Business Revenue by Geography Asia Pacific MEA 5.3% 1.7% India 8.9% North India Americas America 11.9% 61.1% 50.9% Continental Europe Others 9% 6.3% UK Europe & UK 19.9% 20.7% Ibero America 4.3% FY02 9M08 Revenue: $0.9 bn Revenue: $4.2 bn Diversification

  4. Slide 4: Sustaining Growth - Changing Profile of TCS' Business: Revenue by Service Practice

    Sustaining Growth - Changing Profile of TCS’ Business Revenue by Service Practice Asset Leveraged Consulting Infrastructure Solutions 3.4% Services 3.3% 6.5% BPO EIS 6.2% 5.3% Assurance 3.7% Asset Leveraged Solutions 1.6% Enterprise Solutions Others 12.8% 0.3% Enterprise Solutions & BI BI 10.8% ADM

  5. Slide 5: Global/Regional Delivery Locations

    Sustaining Growth - Changing Profile of TCS’ Business Global/Regional Delivery Locations FY02 FY03 - FY08 -4-

  6. Slide 6: Maintaining Profitability – Key Challenges

    Maintaining Profitability – Key Challenges • Salary Inflation – Impact of 200-300 bps per year on a like-to-like basis from FY05 to FY08 – Partially mitigated by broadening of the employee pyramid – Some moderation anticipated in FY09 • Rupee Appreciation – Impact of ~300 bps on Operating Margin dur

  7. Slide 7: Margin Levers: Offshore Revenue and Impact on Operating Margins

    Maintaining Profitability - Margin Levers Offshore Shift Cost Management Pricing/Productivity Currency Hedging Offshore Revenue and Impact on Operating Margins 50.0% 500 bps 40.0% 400 bps 30.0% 300 bps 20.0% 200 bps 125 bps 100 bps 10.0% 100 bps 35 bps (50 bps) 0.0% 0 bps -10.0% -100 bps FY05 FY06 F

  8. Slide 8: Margin Levers: SG&A and Impact on Operating Margins

    Maintaining Profitability - Margin Levers Offshore Shift Cost Management Pricing/Productivity Currency Hedging SG&A and Impact on Operating Margins 25.0% 500 bps 20.0% 400 bps 15.0% 300 bps 10.0% 200 bps 130 bps 120 bps 5.0% 100 bps (20 bps) (20 bps) 0.0% 0 bps -5.0% -100 bps FY05 FY06 FY07 9M08 SG&

  9. Slide 9: Margin Levers: Operating Margin Improvement from Pricing/Productivity

    Maintaining Profitability - Margin Levers Offshore Shift Cost Management Pricing/Productivity Currency Hedging Operating Margin Improvement from Pricing/Productivity 250 bps 207 bps 200 bps 174 bps 151 bps 150 bps 131 bps 106 bps 100 bps 76 bps 50 bps 0 bps 0 bps 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 •

  10. Slide 10: Margin Levers: Currency Hedging and FX Gains/Losses

    Maintaining Profitability - Margin Levers Offshore Shift Cost Management Pricing/Productivity Currency Hedging Realised Rate Currency Pair Change The rupee has appreciated against all FY07 9M08 major currencies through the first nine USD-INR 45.17 40.27 (10.85%) months of FY08 GBP-INR 86.04 81.13 (5

  11. Slide 11: Margin Levers: Hedges Outstanding

    Maintaining Profitability - Margin Levers Offshore Shift Cost Management Pricing/Productivity Currency Hedging Hedges Outstanding as on 31-Dec-2007 USD 2,739m GBP 80m EUR 122m • Well-protected for the near future • Approach is conservative: ~80% of hedges are options; no exotics - 10 -

  12. Slide 12: Sustaining Profitable Growth

    Sustaining Profitable Growth FY06 FY07 9M08 % of % of % of INR m INR m INR m Revenue Revenue Revenue Revenue 132,455 186,332 167,667 Operating Income 33,894 25.6% 46,444 24.9% 39,752 23.7% Net Income 28,831 21.8% 41,315 22.2% 37,632 22.4% - 11 -

  13. Slide 13: In Summary…

    In Summary… • Well-poised to sustain strong growth – Markets, Service Offerings and Delivery Locations are diversified • Equipped to maintain profitability – Offshore Shift – Cost Management – Pricing/Productivity – Currency Hedging – Maturing of strategic initiatives - 12 -

  14. Slide 14: Leading in Challenging Times Sustaining Profitable Growth

    Leading in Challenging Times Sustaining Profitable Growth

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