TCS Prioritizes Wage Hikes Amidst Growth Challenges

Providing wage hikes for its 600,000 employees is a key priority for TCS, according to their CFO, Samir Seksaria.

In a conversation with PTI post-June quarter results, Seksaria highlighted challenges in growth and margins but emphasized the company's focus on profitable expansion.

Amid geopolitical concerns, TCS deferred typical annual wage increases starting in April, but Seksaria emphasized the commitment to delivering these hikes promptly.

Normally, these wage increments impact operating profit margins by about 1.50%, but TCS managed a slight decrease in the June quarter figure, registering at 24.5%.

Seksaria noted the aim is to elevate margins into a 26-28% range, impacted by investment in hiring to meet potential demand, affecting current margin utilization.

He delineated that while demand remains an uncontrollable factor, optimizations within the organization are actionable, focusing on expansion with profitability.

Attrition reached 13.8%, raising concerns, yet Seksaria stressed retaining top talent over expansive hiring to address this issue.

Despite possessing current capacity, TCS may decelerate its lateral hiring unless demand significantly rises, Seksaria confirmed.

Investment strategies remain stable, albeit with potential realignments for increased efficiency, Seksaria noted.

Additionally, capability-driven acquisitions are under exploration for strategic growth opportunities, rather than solely expanding metrics.

(With inputs from agencies.)