Software services bellwether Tata Consultancy Services saw strong employee hiring in the April-June quarter, with the Mumbai-based company net adding 12,356 employees, the highest in the last five years. That takes its consolidated headcount to 436,641 employees as of June-end.
TCS has issued joining letters to over 30,000 fresh graduates, 40 per cent of which were onboarded in the first quarter and the rest expected to join in the second quarter.
The strong hiring by the country’s largest software services exporter, comes in the backdrop of first quarter earnings, which beat analysts' expectations on Tuesday. TCS’ quarterly net profit rose 10.8 per cent from a year ago to Rs 8,131 crore, while revenue grew 11.4 per cent year-on-year to Rs 38,172 crore.
Analysts on average had expected the company to report a net profit of Rs 7,824 crore.
The earnings were driven by strong growth across verticals, particularly, life sciences and healthcare, which saw 18 per cent revenue jump, and revenue from BFSI (banking, financial services and insurance) vertical, where it is the largest services provider, rose 9 per cent. Growth was also broad-based across geographies, with the UK and India businesses clocking 16 per cent growth respectively, and Europe growing 15 per cent. Growth in North America and Asia Pacific region was at 8 per cent and 10 per cent, respectively.
Rajesh Gopinathan, the MD and CEO of TCS said it had been a steady start to the new financial year and customers continued to spend on growth and transformation initiatives.
The company does see some “stress” emerging in the capital markets space, Deutsche Bank has recently announced 18,000 job cuts as it shuts its equity trading business. However, the overall focus of TCS remains on sustaining double-digit growth, he said.
“The deal momentum, (deal) closures, all of that is high. We see fairly strong growth in the areas that were growing strong, which is Europe, the UK, life sciences...We had a strong year, we were at double-digit last year and now we are growing on that base. I am looking at sustaining that double-digit growth,” said Gopinathan.
A lot of the growth is now coming from newer streams like digital, which grew 42 per cent year-on-year in the first quarter and now contributes to 32.2 per cent of TCS’ revenue.
Even as it stepped up hiring last quarter, TCS said it continued to invest heavily in organic talent development. At the end of June quarter, over 315,000 employees had been trained in digital technologies and over 361,000 employees had been trained on agile methods, it said.
Over all, the company’s attrition in the IT services business stood at 11.5 per cent, last quarter.
There are growing worries of economic slowdown in many parts of the world. But that may not have a huge bearing on technology spending much as companies now look at it more as a strategic investment.
“If you take an industry like retail, which went through its most significant disruption and was under tremendous stress. What we saw was technology spending was one thing they were trying to protect and over-invest in as they tried to restructure themselves. That’s a great example of most dramatic visible scenario where technology spend becomes a strategic investment, rather than a back office cost. This theme is playing out in multiple industries,” he added.
TCS shares closed down 2 per cent on Tuesday at Rs 2,131.45 points. The results were announced after markets closed.
