{"id":138555,"date":"2023-01-10T02:17:08","date_gmt":"2023-01-10T07:17:08","guid":{"rendered":"https:\/\/44.250.171.167\/?p=138555"},"modified":"2023-01-10T02:34:12","modified_gmt":"2023-01-10T07:34:12","slug":"tata-consultancy-services-ltd-q3-fy23-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q3-fy23-earnings-conference-call-insights\/","title":{"rendered":"Tata Consultancy Services Ltd Q3 FY23 Earnings Conference Call Insights"},"content":{"rendered":"<p><iframe loading=\"lazy\" title=\"Tata Consultancy Services Ltd Q3 FY23 Earnings Concall\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/lf8JUS31__4?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><strong>Key highlights from Tata Consultancy Services Ltd (<a href=\"https:\/\/44.250.171.167\/symbol\/TCS\/\">TCS<\/a>) Q3 FY23 Earnings Concall<\/strong><\/p>\n<p><strong>Management Update:<\/strong><\/p>\n<ul>\n<li>[00:06:42] TCS said LTM attrition in IT services stood at 21.3%, marginally down QonQ and quarterly annualized attrition also fell by about 6% in 3Q23.<\/li>\n<\/ul>\n<ul>\n<li>[00:13:00] TCS commented that a more balanced year is expected in 2023 due to macroeconomic uncertainties, after two years of strong growth.<\/li>\n<\/ul>\n<p><strong>Q&amp;A Highlights:<\/strong><\/p>\n<ul>\n<li>[00:27:09] Kumar Rakesh from BNP Paribas enquired about the headcount moderation and expectation to end the year with a 4% YoY headcount growth and if it\u2019s an indication of growth visibility. Rajesh Gopinathan CEO said TCS is confident with its net headcount, and have been prudent about hiring for FY23. Going forward, TCS should be back to a more normal hiring trend, in the range of 125,000-150,000 gross for the year, offsetting it with a more expected normalization of attrition to long-term averages.<\/li>\n<\/ul>\n<ul>\n<li>[00:31:36] Vibhor Singhal of Nuvama Equities asked about the drivers of strong performance of retail segment in 3Q23. Rajesh Gopinathan CEO replied that it\u2019s due to Travel &amp; Hospitality performing strongly. In CPG, analytics, sustainability, direct-to-customer is gaining lot of traction. And in retail, grocery also did well.<\/li>\n<\/ul>\n<ul>\n<li>[00:35:32] Vibhor Singhal at Nuvama Equities asked if the momentum in the Travel &amp; Hospitality segment to continue in the coming quarters. Rajesh Gopinathan CEO answered that the company does think the momentum will continue, if there are no major events happening like lockdowns. TCS added that the sector is supply constrained on the demand side and with more capacity, it should continue to do well.<\/li>\n<\/ul>\n<ul>\n<li>[00:39:52] Sudheer Guntupalli with Kotak Mahindra Asset enquired about the medium term growth prospects for TCS. Rajesh Gopinathan CEO replied the company\u2019s stance is very positive. Market by market, US is strong and UK is also going well. But Europe, once the geopolitical situation calms down TCS expects to do well. So TCS is confident about the medium to long term outlook.<\/li>\n<\/ul>\n<ul>\n<li>[00:41:33] Pankaj Kapoor from CLSA queried if cost takeout deals are moving faster in terms of decision-making, and if there\u2019s increased competitive intensity from other lenders. Rajesh Gopinathan CEO answered that decision making speed is varying by market. UK decision making is quite fast, US is normal, and Europe has slowed down significantly. However, the competitive intensity remains high with a narrower field of competitors than in past years.<\/li>\n<\/ul>\n<ul>\n<li>[00:43:26] Pankaj Kapoor of CLSA asked if there\u2019s a rethink in terms of the mode of capital return in favor of dividend versus buyback. Rajesh Gopinathan CEO said there is no rethink in terms of the mode of capital return in favor of dividend versus buyback. \u00a0TCS cannot consider a buyback now due to regulatory considerations, but it may consider in future when possible from a regulatory perspective.<\/li>\n<\/ul>\n<ul>\n<li>[00:44:52] Sandeep Shah with Equirus Securities asked about the current state of enterprise cloud adoption and if the pace would increase in CY23 despite macro issues. Rajesh Gopinathan CEO said customers have different challenges when it comes to cloud transformation. Some need to better architect their applications to leverage the variability of the cloud model, while others may need help with complex workload migration. It will take time and effort to properly execute these transformations, and it won&#8217;t be a quick process.<\/li>\n<\/ul>\n<ul>\n<li>[00:47:28] Sandeep Shah from Equirus Securities enquired if IT budgets will be lower in 1H CY23 vs. 2H or stay the same as other years, given the macro slowdown. Rajesh Gopinathan CEO clarified that in UK, there will be no major shift vs. last year. In the US, TCS is hopeful that caution will dissipate a few months into the year. In Europe, TCS will be incrementally cautious this year vs. last year.<\/li>\n<\/ul>\n<ul>\n<li>[00:52:15] Ravi Menon of Macquarie asked that SG&amp;A, travel costs increasing sharply and if travel will be a continued headwind that will stabilize at this level. N. G Subramaniam said that as normalcy continues to return, TCS expects travel costs to start increasing towards pre-pandemic levels with sales related costs and team meetings increasing.<\/li>\n<\/ul>\n<ul>\n<li>[00:55:36] Gaurav Rateria at Morgan Stanley asked if the ACV growth could be lower than TCV growth due to changing deal mix, and if the deal win trajectory could increase in coming quarters. Rajesh Gopinathan CEO said there has been no major change in the mix of deals between large or small or long-dated or short-dated, but there has been an elongation in decision-making which is causing the qualified pipeline to grow ahead of the TCV growth.<\/li>\n<\/ul>\n<ul>\n<li>[00:57:51] Ashwin Mehta from Ambit Capital asked about the nature of demand in the strong growth in regional market and others. Rajesh Gopinathan CEO replied the nature of demand has come from both market and product side. India and APAC, ex-Australia did well. Also, the product, assets and platform side did well.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Tata Consultancy Services Ltd (TCS) Q3 FY23 Earnings Concall Management Update: [00:06:42] TCS said LTM attrition in IT services stood at 21.3%, marginally down QonQ and quarterly annualized attrition also fell by about 6% in 3Q23. [00:13:00] TCS commented that a more balanced year is expected in 2023 due to macroeconomic uncertainties, [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":125416,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"Tata Consultancy Services Ltd Q3 FY23 Earnings Conference Call Insights #TCS #Q3 #FY23 #Earnings #Stocks","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,8],"tags":[10169,5075,6100],"class_list":["post-138555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-technology-stocks","tag-earnings","tag-it-services","tag-software-services"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":131050,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q1-fy23-earnings-conference-call-insights\/","url_meta":{"origin":138555,"position":0},"title":"Tata Consultancy Services Ltd Q1 FY23 Earnings Conference Call Insights","author":"Praveen","date":"July 11, 2022","format":false,"excerpt":"https:\/\/youtu.be\/DOAeyPKrACU Key highlights from Tata Consultancy Services Ltd (TCS) Q1 FY23 Earnings Concall Management Update: TCS said its LTM attrition in IT services was at 19.7% for the quarter, and expects it to rise further in Q2. Q&A Highlights: Ankur Rudra of JP Morgan enquired about margin headwinds in June\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":126262,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q3-fy22-earnings-conference-call-summary\/","url_meta":{"origin":138555,"position":1},"title":"Tata Consultancy Services Ltd Q3 FY22 Earnings Conference Call Summary","author":"Praveen","date":"January 13, 2022","format":false,"excerpt":"Key highlights from Tata Consultancy Services (TCS) Q3 FY22 Earnings Concall Management Update: TCS expects to increase its investments in its digital core offerings, technology and operations, with cloud continuing to be the big growth driver. The company mentioned that on a LTM basis, the company's attrition in IT services\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/01\/Tata-Consultancy-Services-Q322.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/01\/Tata-Consultancy-Services-Q322.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/01\/Tata-Consultancy-Services-Q322.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/01\/Tata-Consultancy-Services-Q322.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/01\/Tata-Consultancy-Services-Q322.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":134577,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q2-fy23-earnings-conference-call-insights\/","url_meta":{"origin":138555,"position":2},"title":"Tata Consultancy Services Ltd Q2 FY23 Earnings Conference Call Insights","author":"Praveen","date":"October 11, 2022","format":false,"excerpt":"https:\/\/youtu.be\/63lQS-dOUzM Key highlights from Tata Consultancy Services Ltd (TCS) Q2 FY23 Earnings Concall Management Update: [00:03:44] TCS said the company expects supply side issues to start easing in 2H23. [00:05:21] The company recruited 35,000 freshers in 1H23, with 20,000 onboarded in 2Q23. [00:13:25]TCS added 5 more clients in the $100\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/10\/TCS-Info.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":128440,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":138555,"position":3},"title":"Tata Consultancy Services Ltd Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"April 12, 2022","format":false,"excerpt":"https:\/\/youtu.be\/WIgBR_tj5nk Key highlights from Tata Consultancy Services Ltd (TCS) Q4 FY22 Earnings Concall Management Update: TCS said it added $3.533 billion in incremental revenue during the year, the company\u2019s highest ever. \u00a0 The company reported an all-time high employee net additions for 4Q22 of 35,209 and 103,546 for FY22, bringing\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/04\/Tata-Consultancy-Services-Q422.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/04\/Tata-Consultancy-Services-Q422.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/04\/Tata-Consultancy-Services-Q422.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/04\/Tata-Consultancy-Services-Q422.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2022\/04\/Tata-Consultancy-Services-Q422.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":154817,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":138555,"position":4},"title":"Tata Consultancy Services Ltd Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"October 11, 2023","format":false,"excerpt":"Key highlights from Tata Consultancy Services Ltd (TCS) Q2 FY24 Earnings Concall Financial Performance TCS reported a 7.9% YoY growth in revenue in rupee terms, 2.8% growth in constant currency terms, and 4.8% growth in dollar terms. Operating margin was 24.3%, up 110 bps sequentially due to higher utilization and\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":143656,"url":"https:\/\/alphastreet.com\/india\/tata-consultancy-services-ltd-q4-fy23-earnings-conference-call-insights\/","url_meta":{"origin":138555,"position":5},"title":"Tata Consultancy Services Ltd Q4 FY23 Earnings Conference Call Insights","author":"Praveen","date":"April 13, 2023","format":false,"excerpt":"https:\/\/youtu.be\/UIhh6l0AmVw Key highlights from Tata Consultancy Services Ltd (TCS) Q4 FY23 Earnings Concall Management Update: [00:06:43] TCS said it on-boarded over 44,000 freshers, and highest number of experienced professional during FY23. 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