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TATA

CONSULTANCY
SERVICES
BY : WASIM AKRAM
ZABIN KHAN

INTRODUCTION
Tata

Consultancy Services is a provider of


information technology (IT)services. The company
provides a wide range of services including business
consulting, information technology, business process
outsourcing (BPO), infrastructure, and engineering.

The company operates in Americas, Europe, Middle

East,
and
Asia
Pacific.
The
headquartered in Mumbai, India.

company

is

Its Group consolidated revenue: Rs 48893 crores

(march 2012) and Group profit after tax : Rs.10414


crores (march 2012).

HISTORY OF THE
COMPANY
Tata Consultancy Services was established in

the year 1968.Its early contracts included


providing punched card services to sister
company TISCO (now Tata Steel), working on
an Inter-Branch Reconciliation System for the
Central Bank of India, and providing bureau
services to Unit Trust of India.
In

1979, TCS delivered an electronic


depository and trading system called SECOM
for the Swiss company SIS SegaInterSettle.

contd
In 1981, TCS established India's first dedicated

software research and development center, the


Tata Research Development and Design Center
(TRDDC) in Pune.
In

1985 TCS established India's first clientdedicated offshore development center, set up for
client Tandem.

In the early 1990s the Indian IT outsourcing

industry grew rapidly due to the Y2K bug and the


launch of a unified European currency, Euro.

contd
On 25 August 2004 TCS became a public listed

company.
In 2005 TCS became the first India-based IT services

company to enter into the bioinformatics market.


In 2006 TCS designed an ERP system for the Indian

Railway Catering and Tourism Corporation.


In 2008 TCS undertook an internal restructuring

exercise which aimed to increase the company's


agility.

contd
TCS

entered the small and medium


enterprises market for the first time in 2011,
with cloud-based offerings. On the last trading
day of 2011, TCS overtook RIL to achieve the
highest market capitalisation of any Indiabased company.

In the 2011/12 fiscal year TCS achieved

annual revenues of over U$10 billion for the


first time.

TCS BRANCHES IN INDIA


Tata Consultancy Services campus at

Lucknow, Uttar Pradesh.


Tata Consultancy Services campus at
Madhapur, Hyderabad, Andhra Pradesh.
Tata Consultancy Services campus at
Vadapalani, Chennai, Tamil Nadu.
Tata Consultancy Services IN PUNE
Tata Consultancy Services in kolkata

And other.

TCS BRANCHES
ABROAD
Africa: TCS has regional offices in South Africa and Morocco
Asia (ex. India): TCS has regional offices in Bahrain, Beijing,Hong Kong,

Hangzhou, Shanghai, Indonesia, Israel, Japan, Malaysia, Philippines, Saudi


Arabia, Singapore, South Korea, Taiwan, Thailand, UAE (Dubai)
Australia: TCS has a regional office in Australia.
Europe: TCS has regional offices in Belgium, Denmark, Finland, France,

Germany, Hungary, Iceland, Ireland, Italy, Luxembourg, Netherlands,


Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
North America: TCS has regional offices in Canada, Mexico and the United

States.
South America: TCS has regional offices in Argentina, Brazil, Chile,

Colombia, Ecuador, Peru and Uruguay

Vision, Mission &


Values
To create value by leveraging our co-innovation

network in a manner that has an impact on the


customers ecosystem
To be among the top 3 companies worldwide by

2013; Culture of accountability,


certainty to customers.
Their

delivering

values integrity, leading change,


excellence, respect for the individual, and
fostering an environment of learning and sharing.

BOARD OF DIRECTORS
Non-Executive Board Members
Cyrus Mistry, Chairman
S Ramadorai, Vice Chairman
Prof. Clayton M Christensen, Director
Aman Mehta, Director
Dr. Ron Sommer, Director
Venkatraman Thyagarajan, Director
Dr. Vijay Kelkar, Director
Ishaat Hussain, Director
Phiroz A Vandrevala, Director
OP Bhatt, Director

Executive Board Member


N Chandrasekaran, Chief Executive Officer and Managing Director

SERVICES

Source: company website

BUSINESS THEY SERVE

ource: company website

SHAREHOLDING PATTERN

Source: company website

PRODUCT PORTFOLIO
TCS BaNCS : enables transformation in financial services

through a superior and holistic suite of solutions for banks,


capital market firms, insurance companies and diversified
financial institutions.
TCS MasterCraft, a comprehensive suite of products,

provides extensive self-help and SLA-based support that


enable the optimization of all services encompassing
development, deployment, maintenance, support and
transformation.
TCS technology products helps in

achieving superior
operational efficiency and optimize time, cost and energy
investments.

IMPORTANT CLIENTS
SOME IMPORTANT CLIENTS ARE:
GENERAL ELECTRIC
ABN-AMRO BANK
SINGAPORE AIRLINES (ALLIANCE PARTNER)
MICROSOFT
IBM
British Telecom
NSE
Pearl Corporation
National securities depository limited

REVENUE BY SERVICES

ource: company website

GROWTH IN GEOGRAPHIC REGIONS

Source: company website

INNOVATION
Telecom : cloud-based Business Support System

(BSS) platform
providers.

for

communication

service

Retail

: TCS Nolyne is a service oriented


architecture
(SOA)
enabled,
platform
and
hardware-independent point of sale (POS) system.

Hi-tech : : TCS has pioneered the development of

an all encompassing integrated application for the


legal industry called Legal Management System
(LMS).

EXPENDITURE

Source:company website

Corporate social
responsibility
TCS supports local communities and society at large through (i) IT for

community welfare, (ii) TCS-Maitree- volunteer corps consisting of TCS


employees and their families and (iii) the funding of philanthropic
activities.
The key focus areas for TCS CSR work are: Health, Education and
Environment. The programs they launch and the communities they work
with are decided based on the needs of those communities
In addition to benefiting the targeted community, their CSR activities
have the added benefit of giving volunteer corps meaningful projects
into which they can channelize their altruism.
Other CSR activities as TCS funded the restoration of some 274 old and
rare books totaling over 100,000 pages in the University Library in
Mumbai.
TCS encouraged womens empowerment, the program has now expanded
to childrens education and development of local infrastructure.

ETHICS AND TCS


A senior executive at the Vice President level is designated

as Ethics Counselor.
Policies are reviewed from time to time and changes if any

are communicated appropriately across the Company.


At the Board level, the Ethics and Compliance Committee

oversees TCS compliance to the Codes of Conduct to be


followed by the Directors, Officers and other employees.
Monthly Reports are sent to the Committee on matters

relating to the Insider Trading Code and the Code of conduct.

STRATEGY

ource: company website

CUSTOMER
CENTRICITY
Building

and maintaining deep customer


relationship is the key to the Companys mission
to be a trusted business partner to global
enterprises.

By building business units around groups of key

clients in each industry vertical and giving endto-end sales and delivery responsibility to the
business head, TCS has ensured high levels of
accountability, superior customer service and
intimacy.

FULL SERVICES
CAPABILITY
The

Companys continued investments in


building full services capability has resulted in
a comprehensive ,integrated portfolio of
services.

The strategy is finding strong resonance with

clients looking to work with fewer vendors,


who can offer transformative capabilities,
global delivery footprint and time-to-market
advantages in addition to optimisation.

GLOBAL NETWORK DELIVERY


MODEL
The Global Network Delivery Model (GNDM)

of TCS is an industry benchmark that allows


the Company to seamlessly and uniformly
deliver services to global customers from
multiple global locations in India, China,
Europe, North America and Latin America.

STRATEGIC
ACQUISITIONS
The Company primarily focuses on organic

growth.
However, the Company is also open to
selective strategic acquisitions in order to
penetrate select markets, strengthen verticals
as well as enhance offerings.
The strategic acquisitions over the years have
been successfully integrated and have
provided value enhancement.

NON-LINEAR GROWTH
In order to strengthen future sustainability of

the business model, the Company has been


pursuing non-linear growth opportunities,
which would bring in revenue growth without
commensurate growth in headcount.
Non-linearity in the current IT and IT enabled
services businesses come from productivityenhancing
tools,
frameworks,
solution
accelerators
and
managed
services
engagements.

MARKETING
STRATEGIES
Market

penetration strategy : Its current


markets are USA and Europe. As most large
clients in US and Europe are cutting costs, TCS
needs to be more aggressive on cost and
quality front.
Market development strategy :Since these are
fast developing IT market, TCS needs a
paradigm shift in focus from US and EU
markets to these markets to India, Middle-east
and Australia.

MARKETING
STRATEGIES
Product development strategy : It should

concentrate on building expertise in domains


like USA and Europe by strategic acquisitions.
Diversification Strategy : TCS restructured its
global operations to adopt an integrated,
customer-centric approach, which is expected
to be helpful in eliminating the risk factors
arising from the U.S. economic collapse.

HUMAN RESOURCE
POLICIES
The focus has been to create an environment where

performance is rewarded, individuals are respected


and associates get opportunities to realize their
potential.
Key achievements during the year were
recruitment of 70,400 employees across the world.
on-boarding of 32,263 fresh hires from various
campuses.
achieving the best-in-class retention rate.
maintaining
uniformly
high
utilization
rate
throughout the year

CAREER DEVELOPMENT
TCS caters to the employees aspirations, motivating employees to

realize their potential and providing them with a predictable roadmap


and necessary tools for personal growth to retain employees.
Personal Development Planning forms a central part of the annual

appraisal and goal-setting process.


Even focuses on soft skills development including team building,

innovative and creative thinking, cross cultural adaptation etc.


TCS

keeps employees engaged and motivated by providing


opportunities for continuously upgrading competencies by rotation
across roles, technologies, customer and industries and geographies.

TCS has several schemes for recognizing and rewarding.

TRAINING AND
DEVELOPMENT
The Company continued to invest in updating

and upgrading employee skills through


channels such as classroom-based training,
technology-enabled
learning,
external
certifications,
on-the-job-training
and
sponsorship for higher education.
A total of 9,972 person years of effort was

invested in fiscal 2012 on various learning and


development programmes.

ATTRITION RATE

Source:company website

Occupational Health and Safety


TCS is committed to provide its employees a safe and

comfortable work environment, going beyond accidents,


injuries and occupational health hazards, to general the
physical and mental health and well- being of associates
and their families.
TCS have implemented an Occupational Health and Safety

Management
System
(OHSMS)
and
have
recommended for enterprise wide certification.

been

TCS have a Hazard Identification and Risk Assessment

process (HIRA) to identify and analyze the levels of risk


associated with the various activities at each the facility.

RISK MANAGEMENT
The Company has put in place an Enterprise-wide Risk

Management (ERM) programme based on


Committee of Sponsoring Organisations of
Treadway Commission(COSO) framework.

the
the

The risk categories covered under the ERM programme

includes strategic, operational and financial as well as


compliance-related risks.
This includes risk assessment and mitigation at the

company level, business / functional


relationship level and project level.

unit

level,

MERGERS AND
ACQUISITIONS
Acquisition of Citi Group
TCS has acquired Citi Global Services on 8 Oct

2008. Value of the deal was $505 million.


Citi has also signed an $2.5 billion deal
through which TCS will provide process
outsourcing services to Citi and its affiliates
over nine-and-a-half years. This will be
provided through CGSL, the release said.

Acquisition of Pearl Group

TCS has acquired Pearl Group in Oct 2005. Value of

the deal was $94.7 million.


Pearl Group is one of the largest insurance provider

in United Kingdom.
With this contract, TCS will now manage some eight

million policies in UK using the same platform,


increasing the companys share of revenues earned
without having to hire additional staff.

OTHER ACQUISITIONS
Comicrom was acquired in Nov 2005. It is a

Banking BPO in Chile.


TCS Management was acquired in Nov 2006.

The company provides IT Services in Australia.


Value of $13 million.
Phoenix Global Solutions was acquired in May

2004. The deal was of $ 13 million.

COMPETITORS
Infosys
Mahindra Satyam
Wipro
HCL
Patni Computer
Financial Tech
Oracle
IBM

Current position

PEER COMPARISON

Source:monycontrol.com

SWOT ANALYSIS
STRENGTHS

WEAKNESS

Broad services portfolio.


Significant market

position.
Strong network of partners

Pending unjust enrichment

lawsuit could dent TCS'


image.

SWOT ANALYSIS
OPPORTUNITIES

THREATS

Increased focus on

enterprise mobility
solutions.
Positive outlook for cloud

computing market.
Poised to benefit from

growing healthcare IT
industry

Intense competition.
Exchange rate fluctuations

VALUE CREATION

Source: TCS Annual report 2011-2012

VALUE CREATION

ource: TCS Annual report 2011-2012

KEY FINANCIAL
TRENDS

Source: Annual report

MANAGEMENT
EFFICIENCY
20.5
20
19.5
19
18.5
18
17.5
MAR '08

MAR '09

MAR '10

MAR '11

MAR '12

IN PERCENTAGE

DEBT-EQUITY RATIO

DEBT EQUITY RATIO


A measure of a company's financial leverage

calculated by dividing its total liabilities by


stockholders' equity. It indicates what
proportion of equity and debt the company is
using to finance its assets.
From the
graph we can see that the
company has maintained the debt equity ratio
at 0.01 for the last few years. It shows that
the company is financially stable.

OPERATING PROFIT
MARGIN

OPERATING PROFIT
MARGIN
Operating margin is a measurement of what

proportion of a company's revenue is left over


after paying for variable costs of production
such as wages, raw materials, etc.
A healthy operating margin is required for a

company to be able to pay for its fixed costs,


such as interest on debt.

GROSS PROFIT
MARGIN

GROSS PROFIT
MARGIN
A financial metric used to assess a firm's financial

health by revealing the proportion of money left over


from revenues after accounting for the cost of goods
sold. Gross profit margin serves as the source for
paying additional expenses and future savings.
The gross profit margin increased in the year 2010

and 2011 but slowed down in the year 2012 as their


was slowdown in the economy.This is healthy for the
company as without an adequate gross margin, a
company will be unable to pay its operating and other
expenses and build for the future.

RETURN ON CAPITAL EMPLOYED

60

50

40

30

20

10

0
MAR '06

MAR '07

MAR '08

MAR '09

MAR '10

MAR '11

MAR '12

RETURN ON CAPITAL EMPLOYED


A ratio that indicates the efficiency and

profitability
investments.

of

company's

capital

It is increasing from 2010 onwards which

shows that the company


investing their capital.

is

efficiently

CASH PROFIT MARGIN

CASH PROFIT MARGIN


A higher profit margin indicates a more

profitable company that has better control


over its costs compared to its competitors.

On

analysing this ratio also shows an


increasing trend which indicates that this is a
profitable company.

RETURN ON NET
WORTH

RETURN ON NET
WORTH
This ratio is used in finance as a measure of a

companys profitability. It reveals how much


profit a company generates with the money
that the equity shareholders have invested.
The graph shows that the company s net

worth is in an increasing trend which shows


that the company has efficiently utilised its
shareholders investments.

SALES TURNOVER

IN CRORES

SALES TURNOVER
Sales turnover is the company's total

revenue, both the invoice, cash payments and


other revenues.
This ratio also shows an increasing trend with

the total turnover reaching Rs.38858 crores.

BALANCE SHEET
ANALYSIS

In Rs. crores

PROFIT AND LOSS A/C

PROFIT AND LOSS A/C

GROWTH FROM 2011


TO 2012
The Companys earnings before interest, taxes, depreciation, and

amortisation (EBITDA) excluding other income aggregated ` 14,435.31


crores in fiscal 2012 (` 11,178.36 crores in fiscal 2011) a growth of
29.14%.
The profit before tax (PBT) aggregated ` 13,923.31 crores in fiscal

2012 (` 11,020.62 crores in fiscal 2011) a growth of 26.34%.


Net profit after tax (PAT) for fiscal 2012 aggregated 10,413.49 crores

(` 9,068.04 crores in fiscal 2011) a growth of 14.84%. TCS is the first


Indian IT company, which has crossed ` 10,000 crores of PAT in a year.
Gross dividend paid/ proposed for the fiscal 2012 in respect of equity

shares aggregated 5,686.81 crores (` 3,189.14 crores in fiscal 2011).


The Companys consolidated earnings per share (EPS) were ` 53.07 in
fi scal 2012 (` 46.27 in fiscal 2011).

EXPANSION PLANS
TCS plans to buy Rs 300 crore land in Bangalore for training

40,000 professionals.
Tata Consultancy Services (TCS) is expanding Intelnet Global

Services, its business process outsourcing (BPO) joint


venture with Housing Development Finance Corporation
(HDFC), to accommodate 3,000 people by the end of the
current financial year. Intelnet employs 400 people at
present.
In addition, TCS is also exploring the possibility of setting up

a separate BPO outfit to service its existing overseas clients.


In order to garner a better share of the world's IT and ITeS

market, Tata Consultancy Services (TCS) is planning to set


new centers in China and Israel.

RECENT NEWS
TCS becomes first company to cross 3 lakh-crore market
cap
The
country's
biggest
software
exporter
Tata Consultancy Serviceshas widened its lead overSensex
peers RIL, the market leader for many years, andInfosysafter
it became the first company to cross the 3 lakh-crore market
cap in almost two years on March 5
TCSmarket cap stood at 3.07 lakh crore. That was 29,000 crore
more than the value of Reliance Industries' shares, and 1.38
lakh crore more than that of rival Infosys'. Moreover, the current
value of TCS shares exceeds the combined m-cap of the 27
listed companies belonging to the Tata Group by 94,000 crore.
http://timesofindia.indiatimes.com/tech/tech-news/software-services/TCS

REFERENCES
www.moneycontrol.com
Tata consultancy services annual report 2011-2012.
EBSCOHOST : REFERENCE CODE: CEEBF71B-F124-4643-

B732-3490CB272A78 PUBLICATION DATE: 4 Sep 2012.


http://www.tcs.com
http://www.slideshare.net/
http://en.wikipedia.org/wiki/Tata_Consultancy_Services
http://
economictimes.indiatimes.com/tata-consultancy-servic
es-ltd/infocompanylisting/companyid-8345.cms
http://timesofindia.indiatimes.com/tech/technews/software-services/TCS

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