It has been a fantastic quarter for the shareholders because TCS has touched a market cap of $200 billion and congratulations your term has been extended by another five years. So it has just been one of those great quarters for shareholders and a great endorsement for a professional manager like you coming from the board.
Very happy with the overall performance and the confidence that the board has reposed in extending our term. So thank you to you and all our stakeholders.
While in the near term markets may have their own opinion, how should one look at the quarterly performance of TCS? I want to revisit something that you alluded to exactly a year ago, which is that a multi-year cycle for the IT industry has started. Has that trend only got endorsed further?
Absolutely the trend that we called on the multi-year cycle of technology upgradation is something what is gaining conviction and becoming more and more broad-based and that is reflected in our own numbers. If you look at the kind of deal wins that we are seeing, the spread of it across markets and across industries and even more importantly, the growth across our customer universe, almost in every segment of customers by revenue size, we have been able to add customers.
The number of customers from whom we make more than $100 million a year has gone up by four and so on for the $50 million, $10 million and $1 million — every single range. This is what we have been talking about. That it is a multi-year cycle and it is going to be all encompassing and it will touch each and every part of our customer universe and that is now starting to come into play. We are very encouraged by the signs that various demand trends are becoming broad based.
Exactly a year ago, TCS management called for this multi-three-four-year cycle. Has the visibility for the scope, the acceleration and also the size which has opened up in the last 12-18 months — become better? Are you feeling more confident with each passing day?
Even in areas like North America BFSI, retail. If you look at the kind of investments that are going on and the kind of shift that is happening, each of them are part of very large duration projects. So the projects themselves might come in smaller parts but they are all of same nature. In fact, a significant amount of supply chain transformation is going on across retail, manufacturing, and BFSI segments.
The core transformation requires a realignment of internal systems to make them more amenable to ecosystem by integration so that in the case of BFSI, they can participate with fintech; in the case of manufacturing, their ability to participate in the whole extended EV ecosystem that is coming around. Each of these are very large duration projects that are getting triggered. We are seeing clients coming from logistics, semiconductors, shipping, networks and CMI. A very large scale cross industry transformation has got triggered and this will definitely support demand visibility.
A lot of deals that TCS is getting now are domestic facing. These are large, transformational deals. Looking at the way things are moving for the Indian economy, are we in for a very solid and a strong surprise for TCS India business? The US and the European business are still very large but are we in for a big surprise coming from India business also?
In our business it is unlikely that one single thing is going to spurt and create a very significant moment. Yes definitely there are a few large deals seen from the context of the local market in the pipeline and if some of them come to fruition, it would be meaningful for the local market. But it is not something to be over excited about because our business is much more on the ground downstream and it goes through the investment cycle rather than being very contented on any business cycle. But the optimism there gives us confidence.
One of your peer companies told me that the talent crunch is so strong in the IT industry that they almost decided to put up a board in their campus that trespassers will also be hired. How are you dealing with this kind of a demand crunch?
We have been to some extent anticipating this for quite some time. We were the leading company at the time of the downturn to take a very supportive stance on our employees and to go on record saying that we will not retrench because we believe that it is a passing phase and we stayed away from the easy path of retrenchment to fix the short term problems. That has been a major boost for us in terms of trust with our employee base and reaffirmation of our own employee friendly philosophy.
The second big aspect of it of course that we are very familiar with is our continuous investment in retraining and upscaling of our employee base which is the best way to actually meet the kind of demand that we are seeing.
The third has been that in line with what we had spoken to you about the demand trends about a year back, we have significantly upped our campus hiring programme and increased that manifold compared to where it was earlier. So, rather than go back, we stay committed to bring on board and on every single offer that we have made during the pre-pandemic and during the pandemic period, we significantly increased our fresher hiring which is all coming into our company now.
So all three dimensions, doubling down on our employees at the worst period of the pandemic time, significantly increasing retraining and betting our call on the demand visibility that we had, meant we increased our campus hiring. These are all part of the proactive forward looking talent management practices that we have always been leaders in. That should stay us in good stead. We will remain agile to deal with the current spur but our philosophy and our history of staying true to this philosophy will put us as the best and the most desired talent destination for all employees out there.
Have you started planning how soon TCS will have a one million workforce? If you are hiring 75,000 to one lakh, I am sure that the 10 lakh mark would be achieved very soon for TCS?
Specifically that number is not something that we have tracked but we have been planning how do we continue to maintain the culture and the agility in our organisation and to make sure that it is scalable. And again, along those lines, many of the actions that we have taken are very visible. Prime among them, is structuring the company into a series of self-contained autonomous organisational units. We now have more than 150 such individual groups that manage their teams end to end and feed off each other and feed out the common supply chain that we have.
But TCS at its heart remains a conglomeration of small individual teams with a very common shared value system and that is something that we believe is key to our ability to scale and that architecture is unlikely to change anytime soon.
How is this boom different from the previous booms we have seen in IT sector booms that have lasted two to three years and then demand tends to drop? Are we in for a different kind of scenario this time?
I think so. What we are seeing in the Cloud transformation journey is probably the tip of the iceberg or we are only scratching the surface. There is so much more that needs to be done. First, here is a technology where everyday something new happens in this area for the better. Cloud itself is coming up with newer tools, newer opportunities, newer ways of connecting, newer methods of building algorithms and so on.
All this is going to be an integral part of your business applications and more and more of the business is going to be integrated into the Cloud. In that context, we see a multiyear growth opportunity in the Cloud area. This coupled with the realisation that location independent agile is here to stay because people realised that during the pandemic, everybody worked remotely from wherever they considered safe and still came together and delivered significant value to the business whether it is on the efficiency side or on the resilience side or on the transformation side.
What does that do, it means that essentially the co-located concept of agile is gone dead and buried with grass all over its grave. People have adopted location independent agile which means that irrespective of wherever people are, they are able to contribute together and that significantly reduces the cost of doing business, cost of building new systems because people from a low cost location, high cost location can all come together and deliver value. Which means that there is more for less to be done and that is the growth momentum one sees in the marketplace.
FY22 is a year of normalisation where the base effect cannot be viewed given that we had a pandemic last year but for FY23 it is not a forward looking guidance. Are you confident that on a large base also you would be able to maintain industry beating growth rates?
Surely. As I said, this is not about putting a number or any forward guidance. We are confident about the demand outlook and we are gearing ourselves up for that whether it be in terms of capacity, whether it be in terms of investments on capabilities and our offerings portfolio and the kind of partnerships and ecosystem relationships that we are creating. We do believe very strongly in demand over the medium term and we are gearing ourselves completely for that.