Slowdown in TCS to weigh on Tatas' growth ambitions

TCS' cash generation has funded capex at other group entities for over a decade

Krishna Kant  |  Mumbai 

Tata Consultancy Services’ (TCS’) revenue growth in 2016-17 was the slowest since 2008-09. For the first time since its stock exchange listing in 2005, both revenue and profit growth was in single digit for the software major. This, say analysts, could impact Tata group’s growth plans. TCS’ cash generation has helped the Tatas maintain a growth streak despite poor profitability at the rest of the group since the 2008 global financial crisis. On the previous occasion, the company experienced a V-shaped recovery. This time, analysts see a structural ...

TO READ THE FULL STORY, SUBSCRIBE NOW AT JUST Rs 149 A MONTH

Key stories on business-standard.com are available to premium subscribers only.

LOGIN

EMAIL / USER NAME
PASSWORD
REMEMBER ME Forgot password?
LOGIN

Not a member yet ? Resister Now

Connect using any below

  • Don't lose the opportunity of saving $26.77 per month
  • Don't lose the opportunity of saving $26.77 per month
Total Amount
Rs. 0.00
To proceed, kindly select a subscription package

WHAT YOU GET

On Business Standard Digital

  • Access your subscription from anywhere. Be it your computer, tablet or smartphone using a browser or the App, Your Choice.
  • Access to exclusive content, features, opinions and comment, hand-picked by our editors, just for you.
  • Pick your 5 favourite companies. Get all the news upates at the end of each day through E-Mail.
  • Pick the industry that you want to track. And get a daily news letter specific to that industry. Cut out the clutter.
  • And stay on top of your investments. Track stock prices in your portfolio
  • Access 18 years of archival data

On Digital

  • Seamless access to WSJ.com with your Business Standard digital account.
  • Experience the best of the Journal's reporting, video and interactive features.
  • Read about the people and events shaping business, finance, technology, politics, technology and culture.
  • Stay informed with newsletters - an easy way to get WSJ content straight to your inbox - making life easier on your busiest days.
  • More business executives read the Journal globally than any other publication.
*Note :
Our Partners are proud to be associated with this initiative and will contribute Rs 100 x 6 months thereafter, standard rate of Rs 149 will be charged.
Offer valid for Indian residents only
Requires you to share personal information like PAN, Date of Birth, and Income.
*Annual saving on WSJ subscription price of US$ 347.88 (12 months @ US$ 28.99 per month)
* 1US$ = 67.50 INR.
*Please note that this offer is not valid if you are/were a registered/existing user on WSJ Digital

Slowdown in TCS to weigh on Tatas' growth ambitions

TCS' cash generation has funded capex at other group entities for over a decade

Tata Consultancy Services (TCS) revenue growth in FY17 was slowest since FY09 and first time since its listing in 2005, both topline and bottom line growth was in single digits for the software major. This the analysts say could have a big impact on the Tata group growth plans given surplus cash has been helped Tatas' to maintain their growth streak despite poor profitability of the rest of the group since the 2009 Lehman crisis. (See the adjoining chart)While on the previous occasion, the company experienced a V-shaped recovery, this time around analysts see a structural slowdown in global IT leading to sub-par growth for company. "I don't foresee any immediate pick-up in the IT sector growth for at least two years. This would translate into single digit growth for most Indian IT companies during the period," says G Chokkalingam, founder & CEO Equinomics Research & Advisory. Earlier this month, Garner cut worldwide IT spending growth in 2017 to 1.4 per cent from its earlier .. Tata Consultancy Services’ (TCS’) revenue growth in 2016-17 was the slowest since 2008-09. For the first time since its stock exchange listing in 2005, both revenue and profit growth was in single digit for the software major. This, say analysts, could impact Tata group’s growth plans. TCS’ cash generation has helped the Tatas maintain a growth streak despite poor profitability at the rest of the group since the 2008 global financial crisis. On the previous occasion, the company experienced a V-shaped recovery. This time, analysts see a structural ... image
Business Standard
177 22