TCS says it is confident of double-digit sales growth in FY23 after a 17.1 percent increase in sales

MUMBAI: TCS is confident to deliver double-digit revenue growth in the current fiscal year and will continue to target a comparable performance in FY24, a senior executive said Tuesday. The ability of the largest IT services exporter to reach that number in FY24 will depend on how the macroeconomic situation, including geopolitical tensions, commodity price pressures, inflation and financial tightness concerns, will develop, Chief said. Operating Officer N Ganapathy Subramaniam to PTI.

“(For) this year (FY23), probably we’ll be there (double digit growth). What we need to do is we just need to keep the run rate in the remaining quarters and we’ll be able to achieve that, no problem. In FY24 it’s too early to call. The goal is to stay on double-digit growth,” said Subramaniam.

For the first half of the fiscal year, the turnover of the Tata Group company has increased by 17.1 percent to Rs 1.08 lakh crore.

Commenting after announcing its second quarter results on Monday, the company expressed concern about the global economy, saying that business is challenging and that it will remain vigilant to assess the impact of the general market on its business. minimalize.

Subramaniam said on Tuesday that demand for IT services remains strong.

When asked about concerns about high inflation and interest rate tightening in the US’s largest market, he said consumer behavior does not point to a recession.

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The room to watch out for is Europe, which is bracing for a rough winter due to energy supply challenges, Subramaniam said, adding that it could affect the manufacturing sector if factories stop working.

TCS does not rely heavily on the sectors that could potentially be affected, he added.

The company is well positioned to continue hitting its total contract value (TCV) of $7-9 billion per quarter in the coming quarters, but it will eventually need to increase to realize its longer-term revenue growth ambitions.

Its $7-9 billion quarterly TCV is good until it hits $28 billion in annual sales, but the new deals will need to reach $10 billion and above, Subramaniam said.

The company aims to double its revenue to $50 billion by 2030.

TCS has not changed its acquisition strategy and will remain selective about inorganic growth opportunities, he said.

“We’re not averse to acquisitions, but it has to add value for us, either from an IP (intellectual property) perspective or from a customer base perspective. We don’t just want to acquire people, we need to have an asset to match.” he says. said.

In terms of profitability, Subramaniam said the company has multiple levers that can be leveraged to increase its operating profit margin to its target of 25 percent.

He said usage has recently fallen from a high due to very high hiring, while there are other aspects, such as currency and prices, that will be looked at as well.

“We used to be at 90 percent (using usage), now we’re at about 83 percent. So the 7 percent buffer we have can help improve utilization and increase sales and bottom line,” he said.

When asked about competition from pure-play consultancies, he acknowledged that both TCS and such companies that have developed digital practices compete for the same company.

“They have a consulting background, so their ability to… Articulate and package will be much better than what we do. They are ready to sell… But in execution we will be superior. Finally, customers choose one of the these two,” he said.

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