“Source:Economic Times ”
BENGALURU : BENGALURU: Tata Consultancy Services’ revenue from other Tata companies grew more than 13% in FY19 to nearly Rs 2,600 crore, as the Mumbai-based software services exporter doubles down on capturing more IT spending by group entities.
Companies typically spend 1-2% of total revenue on information technology, making the $100 billion Tata Group a significant source of business for IT companies in India.
When Tata Group chairman N Chandrasekaran led TCS, he had put in place a strategy to gain a significant portion of the group’s IT spending.
In FY19, TCS earned Rs 27 crore in revenue from Tata Sons, Rs 298 crore from subsidiaries of Tata Sons and Rs 2,241 crore from affiliates and joint ventures of Tata Sons and its subsidiaries.
In FY18, revenue from group companies stood at Rs 2,266 crore, according to TCS’ annual report.
In rupee terms, TCS’ FY19 revenue grew about 19%.
As IT firms look to the private sector for growth in India, TCS has made strong headway in the market, analysts say.
“They are the preferred candidate for the Tata Group. Under Chandra, the group is increasing its technology focus and TCS will be first in line to benefit,” an analyst with a Mumbai-headquartered company said.
TCS, with its experience in retail and manufacturing, was capitalizing on the group’s plans to spend in those areas, he said.
For instance, the group plans to increase presence in the ecommerce sector, with Chandrasekaran telling ET earlier that it was registering a new company for online retailing.
TCS had helped build the group’s current ecommerce platform, Tata Cliq.
Tata Sons is also tapping TCS’ talent to drive its digital push.
ET reported earlier that Pratik Pal, who headed TCS’ $3.4 billion retail business, moved to Tata Sons to head its overall digital play.
Sarthak Banerjee, who was previously global head of strategic automation and AI consulting at TCS, has moved as vice president of group digital in May, his profile on professional networking site LinkedIn showed.