Tata Consultancy Services Limited · NSE:TCS

Tata Consultancy Services — Q4 FY2006 Earnings Presentation

39 slides from Tata Consultancy Services's earnings presentation, May 2006

  1. Slide 1: Results for Quarter IV FY 2005-06

    2.97 2.24 1.56 1.04 0.69 0.88 Results for Quarter IV FY 2005-06 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Revenue US $ Billion © Tata Consultancy Services Ltd. May 2006 1

  2. 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

  3. Slide 3: Highlights

    Highlights ƒ Strong growth in revenues from our international customers and strategic deals has helped us to post a volume-led growth during Q4. ƒ Integrated full services business model achieving success in expanding our share with our customers. 89 of our top 100 customers leveraged one or more se

  4. Slide 4: Financial Performance

    Financial Performance © Tata Consultancy Services Ltd. May 2006 4

  5. Slide 5: Indian GAAP Growth Summary – Annual

    Indian GAAP Growth Summary – Annual Consolidated Indian GAAP (Rs. Crores) FY 2006 FY 2005 Income from IT & Consultancy Services 12,397 9,095 % Growth Y-o-Y 36.31% Total Income 13,252 9,748 % Growth Y-o-Y 35.94% PBIDT 3,664 2,814 % Growth Y-o-Y 30.22% Profit After Tax 2,967 1,977 % Growth Y-o-Y 50.07

  6. Slide 6: Indian GAAP Income Statement - Annual

    Indian GAAP Income Statement - Annual Consolidated Indian GAAP Rs. Crores % of Revenue TCS Limited Consolidated TCS Limited Consolidated FY 2006 FY 2005 FY 2006 FY 2005 FY 2006 FY 2005 FY 2006 FY 2005 INCOME a) IT & Consultancy Services 10,673.22 7,794.41 12,396.84 9,094.64 95.17 97.10 93.55 93.29 b

  7. Slide 7: Indian GAAP Growth Summary – Quarterly

    Indian GAAP Growth Summary – Quarterly Q3 FY06 Q4 FY05 Q4 FY06 Consolidated Indian GAAP (Rs. Crores) Incl TIL Excl TIL Income from IT & Consultancy Services 3,472 3,309 2,316 % Growth Q-o-Q 4.93% % Growth Y-o-Y 49.95% Total Income 3,709 3,486 2,578 % Growth Q-o-Q 6.39% % Growth Y-o-Y 43.85% PBIDT (b

  8. Slide 8: Indian GAAP Income Statement – Consolidated – Q4

    Indian GAAP Income Statement – Consolidated – Q4 06 Consolidated Indian GAAP Rs. Crores % of Revenue Q3 FY 2006 Q4 FY 2005 Q3 FY 2006 Q4 FY 2005 Q4 FY 2006 Q4 FY 2006 Incl TIL Excl TIL Excl TIL Incl TIL Excl TIL Excl TIL INCOME a) IT & Consultancy Services 3,472.21 3,309.20 3,147.04 2,315.53 93.61 9

  9. Slide 9: Indian GAAP Income Statement – Unconsolidated – Q4 FY06

    Indian GAAP Income Statement – Unconsolidated – Q4 FY06 Unconsolidated Indian GAAP Rs. Crores % of Revenue Q3 FY 2006 Q4 FY 2005 Q3 FY 2006 Q4 FY 2005 Q4 FY 2006 Q4 FY 2006 Incl TIL Excl TIL Excl TIL Incl TIL Excl TIL Excl TIL INCOME a) IT & Consultancy Services 2,926.02 2,828.33 2,645.62 2,046.53 9

  10. Slide 10: Indian GAAP Balance Sheet - Consolidated

    Indian GAAP Balance Sheet - Consolidated Consolidated Indian GAAP Rs Crores % 31-Mar-06 31-Mar-05 31-Mar-06 31-Mar-05 Source of Funds Shareholders' Funds 6,250.95 3,477.54 95.21 90.65 Minority Interest 164.72 89.74 2.51 2.34 Loan Funds 116.69 203.01 1.78 5.29 Deferred Tax Liability 33.07 66.00 0.50

  11. Slide 11: US GAAP Growth Summary – Annual

    US GAAP Growth Summary – Annual Consolidated US GAAP (Rs Million) FY 2006 FY 2005 Revenue 132,454 97,272 % Growth Y-o-Y 36.17% Gross Margin 60,839 45,989 % Growth Y-o-Y 32.29% Operating Income 34,137 26,928 % Growth Y-o-Y 26.77% Net Income (before one-off Items) 29,074 22,539 % Growth Y-o-Y 28.99% N

  12. Slide 12: US GAAP Income Statement - Annual

    US GAAP Income Statement - Annual Consolidated US GAAP USD Million Rs Million % of Revenue FY2006 FY2005 FY2006 FY2005 Revenue 2,968.33 132,454.44 97,272.37 100.00 100.00 Cost of revenue 1,604.92 71,615.56 51,283.24 54.07 52.72 Gross margin 1,363.41 60,838.88 45,989.13 45.93 47.28 SG & A expenses 59

  13. Slide 13: COR – SG&A Details - Annual

    COR – SG&A Details - Annual Rs. Millions % of Revenue Cost of Revenue FY 2006 FY 2005 FY 2006 FY 2005 Employee Cost 55,975.18 40,341.54 42.26 41.47 Equipment & Software 7,389.02 5,591.70 5.58 5.75 Depreciation 1,931.22 1,107.23 1.46 1.14 Travel 2,354.20 1,518.75 1.78 1.56 Communication 1,184.52 808.

  14. Slide 14: US GAAP Revenue Growth – Quarterly

    US GAAP Revenue Growth – Quarterly Q3 FY06 Q4 FY05 Consolidated US GAAP (Rs Million) Q4 FY06 Incl TIL Excl TIL Revenue from International Business 32,960 30,433 22,454 % Growth Q-o-Q 8.31% % Growth Y-o-Y 46.79% Revenue from Indian Business 4,273 4,093 3,392 % Growth Q-o-Q 4.41% % Growth Y-o-Y 26.00%

  15. Slide 15: US GAAP Growth Summary – Quarterly

    US GAAP Growth Summary – Quarterly Q3 FY06 Q4 FY05 Consolidated US GAAP (Rs Million) Q4 FY06 Incl TIL Excl TIL Gross Margin 16,855 15,960 12,163 % Growth Q-o-Q 5.61% % Growth Y-o-Y 38.57% Operating Income 9,197 9,035 6,809 % Growth Q-o-Q 1.79% % Growth Y-o-Y 35.07% Net Income 7,958 7,502 4,698 % Gro

  16. Slide 16: US GAAP Income Statement - Quarterly

    US GAAP Income Statement - Quarterly Consolidated US GAAP USD Million Rs Million % of Revenue Q3 FY06 Q4 FY05 Q3 FY06 Q4 FY05 Q4 FY06 Q4 FY06 Q4 FY06 Incl TIL Excl TIL Excl TIL Incl TIL Excl TIL Excl TIL Revenue 834.42 37,233.69 34,525.57 32,644.53 25,845.55 100.00 100.00 100.00 100.00 Cost of reven

  17. Slide 17: COR – SG&A Details - Quarterly

    COR – SG&A Details - Quarterly Rs. Millions % of Revenue COR Q3 FY06 Q4 FY05 Q3 FY06 Q4 FY05 Q4 FY06 Q4 FY06 Incl TIL Excl TIL Excl TIL Incl TIL Excl TIL Excl TIL Employee Cost 16,356.02 14,884.72 14,119.45 10,621.53 43.93 43.11 43.25 41.10 Equipment & Software 1,866.21 1,487.68 1,243.17 1,588.54 5.

  18. Slide 18: US GAAP Balance Sheet

    US GAAP Balance Sheet Consolidated US GAAP 31-March-2006 31-March-2005 Rs Million % Rs Million % Source of Funds Shareholders Funds 58,407.83 68.21 31,977.31 65.38 Short term borrowings 979.35 1.14 1,927.80 3.94 Current liabilities 22,726.38 26.54 13,196.49 26.98 Minority Interest 1,563.68 1.83 1,32

  19. Slide 19: Effect of Merger with TIL in Q1, Q2, Q3 FY06

    Effect of Merger with TIL in Q1, Q2, Q3 FY06 US GAAP Consolidated Q1 FY2006 Q2 FY2006 Q3 FY2006 TCS TIL Merged TCS TIL Merged TCS TIL Merged Revenue 27,094.31 2,104.68 29,128.71 29,513.49 2,204.16 31,566.47 32,644.53 2,157.90 34,525.57 Operating Income 7,423.43 269.84 7,736.04 8,003.83 263.23 8,168.

  20. Slide 20: Customer Coverage Customer Proximity

    Global Global Delivery Delivery Centers Centers •• Very Very High High Scale Scale India (matured) Low Breadth of Skills High •• Serves Serves large customers large customers China (emerging) Low •• High High High Depth Depth && Breadth Breadth of of skills skills •• Matured Processes Matured Proces

  21. Slide 21: Growth by Market

    Growth by Market • Expansion of services with our blue-chip 6.2% client-base in North America has 11.5% enabled our growth in North America. We have several new account wins that Americas will fuel this growth for the future. Europe India • Increased IT spending towards global sourcing by customers

  22. Slide 22: Growth by Domain

    Growth by Domain • Expansion of services to existing 9.9% clients and multiple large deal wins 3.0% BFSI are continuing our growth in the 3.7% 41.8% Manufacturing BFSI segment. 6.4% Telecom Life Sciences & Healthcare • Ramp-up in accounts won in the 4.5% Retail & Distribution previous quarters and n

  23. Slide 23: Growth by Service Line

    Growth by Service Line 3.7% 2.6% • TCS’ new growth areas BPO, Infrastructure Services, Consulting 24.5% Assurance Services, Engineering & Industrial Solutions – have all scaled up and are experiencing significantly higher growth rates 69.3% • TCS continues to win a number of end-to-end enterprise so

  24. Slide 24: Operational Parameters

    Operational Parameters • TCS’ Global Network Delivery Model has gained scale and maturity. • We have over 40 of our large Q4 FY 2006 Q3 FY 2006 FY 2006 FY 2005 Revenue % Incl TIL Excl TIL customers use our GDCs in Latin Delivery Location* America, Hungary and China. We Onsite 59.03 58.26 61.40 62.52

  25. Slide 25: Client Parameters

    Client Parameters Q4 FY 2006 Q3 FY 2006 FY 2006 FY 2005 Incl TIL Excl TIL Clients Contribution * Revenue % # 3.70 3.67 3.97 3.70 5.10 Top 1 Top 5 17.00 17.02 17.50 17.00 19.20 Top 10 27.50 27.61 27.70 27.50 30.50 US$ 1 mln Clients 256 243 229 256 214 US$ 5 mln Clients 96 87 87 96 76 US$ 10 mln Clien

  26. Slide 26: Client Acquisition and Expansion

    Client Acquisition and Expansion Particulars Q4 FY 2006 Q3 FY 2006 FY 2006 FY 2005 Incl TIL Excl TIL Active Clients 748 766 677 929 621 New Clients 89 88 83 330 246 Revenue % from Repeat Business 91.9 94.9 94.8 95.2 95.1 Revenue % from New Business 8.1 5.1 5.2 4.8 4.9 26

  27. Slide 27: Client and Delivery Highlights

    Client and Delivery Highlights ƒ TCS successfully implemented common loan origination & servicing of credit card application for a major financial services company in US ƒ TCS implemented E-Signature for one of the largest life insurance companies in the U.S. resulting in Improved cycle time, Remote

  28. Slide 28: Representative Wins

    Representative Wins ƒ A major telecom service provider in Europe selects TCS for an end-to-end development and deployment of a strategic OSS platform. The deal is worth over $35m. ƒ A leading European consumer products company has selected TCS for providing an end- to-end application outsourcing in

  29. Slide 29: Profiles of ‘Select’ Growth Engines

    Engineering & Asset Based Industrial Services Offerings Global Consulting Engineering Products Business & Process Embedded S/W Consulting Product Based R&D Services Services IT Strategy Consulting IT Operations Consulting Security Consulting IT Solutions & Services IT Infrastructure Services Applica

  30. Slide 30: BPO

    BPO ƒ Our current associate strength in BPO operations is 4700 at the end of FY06 ƒ Key Engagements y For a leading US retail store chain, TCS successfully transitioned operations to offshore in the areas of F&A, Merchandizing, Customer Care and Services. We have now ramped this to 250+ FTEs y A tel

  31. Slide 31: Engineering & Industrial Services

    Engineering & Industrial Services ƒ EIS practice added 19 new overseas customers to TCS' customer base in Q4, and 92 overall during FY 06 ƒ The practice grew from 2442 associates in FY05 to 4054 today added 1612 in FY06 ƒ Key Engagements y A UK based utilities company selected TCS to provide control

  32. Slide 32: IT Infrastructure Services

    IT Infrastructure Services ƒ ITIS Practice continues to grow adding 16 new clients and 420 employees in Q4. TCS now has 121 active clients and 2795 employees in ITIS. ƒ Key Engagements y TCS’ Global Infrastructure Command Center has been well received by the market y Set-up a global operations cente

  33. Slide 33: Assurance Services

    Assurance Services ƒ TCS won 24 new clients for assurance services in FY06, including 7 of the Fortune 500. ƒ Services like Enterprise Test Strategy Consulting is gaining traction among our customers. Today Assurance Services provides test strategy consulting to 5 of the Global 500 companies. ƒ Key

  34. Slide 34: Global Consulting Practice

    Global Consulting Practice ƒ GCP front-ended and added 12 new customers in Q4 and 49 for FY06. GCP services 126 active customers today. ƒ GCP won 77 new engagements in Q4. ƒ Discrete consulting solutions in Architecture, Process Transformation, Information Security, Strategy and Governance have reac

  35. Slide 35: Human Resources

    Human Resources © Tata Consultancy Services Ltd. May 2006 35

  36. Slide 36: Total Employees 66,480

    Total Employees 66,480 ƒ No. of TCS Employees : 62,832 ƒ No. of Employees with Indian subsidiaries (CMC and WTI): 3,648. 70,000 3,648 60,000 3,688 3,736 50,000 3,455 62,832 40,000 59,216 30,000 53,042 20,000 48,583 10,000 0 Q1-06 Q2-06 Q3-06 Q4-06 Associates in TCS Ltd Associates in Indian Subsidiar

  37. Slide 37: FY06 Additions - Gross 27,377 & Net 21,140 Employees

    FY06 Additions - Gross 27,377 & Net 21,140 Employees ƒ The net additions through recruitment is 14,758 and net additions through M&A is 6,382 (TIL, ASDC, AFS, BTS, FNS, Comicrom) ƒ In Q4-06 we recruited a net of 3,571 employees ƒ Utilisation Rate in Q4-06 was 78.95% (excluding trainees), 75.80% (inc

  38. Slide 38: Global and Diverse Workforce

    Global and Diverse Workforce ƒ No. of Employees in Global Delivery Centers increased to 1,867 from 1,223 ƒ Non-Indian nationals was 6.5% from 52 nationalities ƒ 24% of our workforce comprises women ƒ 51% of our employees have more than 3 years of work experience ƒ We have 2591 MBAs , 108 PHDs and 36

  39. Slide 39: Thank You!

    Thank You! 39 TATA CONSULTANCY SERVICES

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