TCS agreement: TCS signs an agreement with M&S; expects $1 billion in retail business in Europe to exceed overall revenue

A senior official said TCS expects the billion-dollar retail business in the UK and Europe to outpace the company’s overall revenue growth due to strong demand for IT services. On Wednesday, the country’s biggest software exporter announced a multi-million dollar, multi-year deal with Marks & Spencer, with whom it has worked for more than a decade, to transform the British retailer’s human resources operations.

The company’s commercial director for Europe, Abhijit Niyogi, told PTI that demand for IT services remains strong in Europe and the UK despite headwinds such as inflation, tightening rates and political unrest in the UK. UK and the ongoing Russian invasion of Ukraine.

Stating that the business he leads contributes over $1 billion a year, Niyogi said it has seen faster revenue growth than the company reports on an overall basis over the past few years. last two or three quarters.

About 10-15% of the company’s total contract value (TCV) comes from the company.

Currently, it is pursuing medium to large sized deals with a revenue possibility of around $300 million as retailer demand continues in the market.

When asked if he sees the company continuing to outpace the company’s broader revenue growth, Niyogi said yes.

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“At least for FY23, I don’t see any downturn specifically as a result of a very strong first quarter. What we see for the second and third quarters, the pipeline is robust, the conversion rate is also quite good and demand is at an all-time high,” he added.

In the first quarter of the fiscal year, TCS reported revenue growth of 10.2% to $6.7 billion, with the retail sector leading the pack with growth of more than 25% in its revenues at constant exchange rates.

He said retailers want their software vendors to be partners in good times and testing periods and added that customers aren’t so skeptical because of macros.

Profit margins are typically higher in growth and transformation deals like the one signed with M&S, as customers want to invest in futuristic services tailored to their customers and brand importance.

Around 70% of the work on the M&S deal will be outsourced to India. At the same time, the rest will take place locally in the United States, Niyogi said, adding that much of its existing staff with expertise in the area which includes the regulatory processes governing the retail sector in the Kingdom Kingdom will be deployed on this project.

While TCS has worked on HR solutions in the past, the work of M&S, which has more than 80,000 employees, is new because it’s done on the Oracle supply chain management platform, it said. -he declares.

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