Tata Consultancy Services (BOM:532540)

QUOTE AND NEWS
The Economic Times  Jul 16  Comment 
While booking short-term gains may become tricky, it also means that long-term investors may find more opportunities to make fresh purchases.
The Economic Times  Jul 16  Comment 
"I have always maintained two things — one that digital adoption is picking up, and two that our consulting is very tightly integrated with our execution," said NChandrasekaran
The Economic Times  Jul 15  Comment 
While booking short-term gains may become tricky, it also means that long-term investors may find more opportunities to make fresh purchases.
The Economic Times  Jul 15  Comment 
"I have always maintained two things — one that digital adoption is picking up, and two that our consulting is very tightly integrated with our execution," said NChandrasekaran
The Hindu Business Line  Jul 15  Comment 
Even though TCS, India’s largest IT services firm, posted strong Q1 numbers, there are doubts over whether the company has returned to its former glory. Sluggish growth in the BFSI vertical, lower ma...
The Hindu Business Line  Jul 15  Comment 
Reliance SecuritiesTCS (Buy)CMP: ₹2,441.90Target: ₹2,775After several quarters of disappointment, TCS delivered a solid 1QFY17. Dollar revenue rose 3.7 per cent q-o-q at $4,362 million, EBIT margin w...
The Hindu Business Line  Jul 15  Comment 
Infosys shares slumped as the company has cut FY revenue growth forecast. The company shares fell as much as 9.84 per cent to their lowest since January 13, making them the top losers on the Nifty...
The Economic Times  Jul 15  Comment 
The leading transactions included expansion by TCS, leasing of over 4,00,000 sq ft in Noida and 3,75,000 sq ft in Bengaluru.
The Economic Times  Jul 15  Comment 
TCS Q1 revenue rose 3.7% to $4.36 billion, meeting analyst estimates. TCS' margin contracted less than expected but it was a bad performance on that metric.
The Economic Times  Jul 15  Comment 
The Economic Times  Jul 14  Comment 
The volume growth, measured as percentage change in the work hours billed quarter-on-quarter, was 3.4% for TCS during the June 2016 quarter.




 

Tata Consultancy Service (BOM:TCS) is an Indian software services and consulting company. It is one of India's oldest and largest providers of information technology and business process outsourcing services. As of 2007, it is Asia's largest information technology firm. TCS, a part of the Tata group, provides information technology and management consultation services to organizations in more than 53 countries. The company offers e-business, application development and maintenance, architecture and technology consulting, engineering, security, infrastructure development and management and quality consulting services.

In addition, TCS offers software packages for electronic banking, insurance billing, customer relationship management, and hospital management. It caters to finance and banking, insurance, telecommunication, transportation, retail, manufacturing, pharmaceutical, energy and utility industries. The company generates around 19% of its revenues from the manufacturing industry, and 6% of its revenues from its engineering and industrial services (EIS) business.

The company was founded in the year 1968 and is based in Mumbai. It has over 89,000 trained IT consultants in 47 countries.

Company Overview

History

Tata Consultancy Services was established in the year 1968. It began as the "Tata Computer Centre", a division of the Tata Group, whose main business was to provide computer services to other group companies. However, the potential of computerization and computer services was realized early on, and an electrical engineer from the Tata Electric Companies, Fakir Chand Kohli, was brought in as the first General Manager. Soon after, the company was named Tata Consultancy Services.

TCS's first software export project was undertaken in 1974 when it converted the Hospital Information System from Burroughs Medium Systems COBOL to Burroughs Small Systems COBOL. This project was carried out entirely in TCS Mumbai on the ICL 1903 Computer. In 1980, TCS and a sister Tata firm accounted for 63% of the Indian software industry exports, $4 million shared by 21 firms. In 1984, TCS set up an office in the Santacruz Electronics Export Processing Zone (SEEPZ) – Mumbai.

The early 1990s saw a tremendous surge in TCS's business, which also resulted in a massive recruitment drive by the company. In early and mid-1990s, TCS re-invented itself to become a software products company. In the late 1990s, to accelerate its revenue growth, TCS decided to employ a three-pronged strategy – developing new products with high revenue earning potential, tapping domestic and other fast growing markets and focusing on inorganic growth through mergers & acquisitions. In late 1998, the company decided to concentrate on new revenue opportunities including Y2K and Euro conversion. E-business was a major area of focus in the late 1990s.

In 1999, TCS started an annual IT Quiz called TCS IT WIZ in India. It has been a great success and a matter of craze among young students inclined towards IT.[1]

In 2004, TCS became a publicly listed company.

In 2008 Tata Consultancy Services was involved in a variety of industries. Some of these included telecom, government, insurance, manufacturing, high tech, and banking and financial services. They offer product life cycle management and systems integration to their customers.

Services

Tata Consultancy Services offers the following services to its customers:

  • IT Solutions and Services (74.9% of net sales): This segment develops IT products for and offers IT services to customers. Some of these IT products include software applications and systems for performance management, customer relationship management and supply chain management. Some of the company's IT services include software application management, system integration, data mining and data quality management.
  • Business Process Outsourcing (11.3% of net sales): This segment helps customers automate and complete specific non-core business tasks. Some of these non-core business tasks include payroll, finance and accounting, and human resources.
  • Engineering and Industrial Services (5.4% of net sales): This segment helps customers engineer and manage products, design and automate plants, and source for and manufacture components.
  • IT Infrastructure Services (6.5% of net sales): This segment builds and maintains IT infrastructure for customers.
  • Asset Based Offerings (3.6% of net sales): This segment develops IT products for and offers IT services to customers that operate specifically in the banking, financial services and insurance industries.
  • Global Consulting (3.4% of net sales): This segment advises customers on management and IT issues.

Industries

Tata Consultancy Services sells to companies in the following industries:

  • Banking, Financial Services and Insurance (Rs. 10,091 crore or 44.1% of net sales)
  • Retail and Distribution (Rs. 1,476 crore or 6.5% of net sales)
  • Others (Rs. 5,360 crore or 23.4% of net sales): Industries that fall under this category include Transportation, Life Sciences and Health Care, Energy and Utilities, Media and Entertainment, Travel and Hospitality, Government etc.

Trends and Forces

Tata Consultancy Reaps The Benefits From Outsourcing

For most US companies, the most expensive part of running a business is employing people. These companies have to deal with workers unions, minimum salary laws, overtime, etc, all of which increase costs and decrease profits. That is why when companies have the opportunity to hire cheaper labor, they pounce on the opportunity. When US companies go to India to look for cheap labor, Tata Consultancy benefits as it helps provide the solutions that companies are looking for. Additionally, because Tata is primarily an IT service provider, the company can reach out to companies in almost every industry. The more companies that look to outsource their labor, the more business Tata is getting, which helps the company's bottom line.

Tata Is Susceptible To Global Economic Conditions

Because Tata is an IT service provider, the company relies on the growth and expansion of other businesses for revenue. During tough economic times, businesses consolidate and thus the demand for Tata's services declines, hurting the company's bottom line.

Competition

Domestic competitors include:

Overseas Competitors:

References

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