Tata Consultancy Services' revenue has shown substantial growth, increasing from 1.23 lakh crore in FY18 to 2.25 crore in FY23, reflecting a CAGR of 11.3%. However, the net margins have experienced a dip from 21% in FY18 to 18.7% in FY23, with the highest in FY19 at 21.5%. Notably, the return on equity has seen significant growth, rising from 30.2% in FY18 to 46.2% in FY23.

The company remains financially stable, showing no insolvency risk attributed to debt, as the current asset ratio to total liability (current + non-current) stands at 2.1 times. Additionally, the total leases and payables represent 14.7% and 20% respectively of total liabilities.

The company's efficiency in cash conversion has improved, with the average days to convert sales to cash decreasing from 74 days in FY18 to 67 days.

While the employee headcount has grown from 3.9 lakhs in FY2018 to 6.15 lakhs in FY2023, the average revenue generated per employee has increased by a CAGR of 3%, climbing from 31 lakhs in FY2018 to 36.7 lakhs in FY2023. The average cost per employee has grown at a CAGR of 4.3%, from 16.8 lakhs per annum to 20.7 lakhs per employee.

Analysing the cost-benefit dynamics, we can note that for every rupee spent on employee benefits in FY2018, the company generated Rs.1.85 in revenue. However, in FY23, this ratio has declined by 4.3% to Rs.1.77. I would like to believe; this downturn is likely influenced by the global economic slowdown impacting the information technology sector.

Date - 5th Feb '24; Source - Company Annual reports ;

LR