TATA CONSULTANCY SERVICE

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Author: Farhan Ali (013-16-0057)
Under Supervision of : Sir Arslan Soomro
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Course Tittle: Forecasting and Budgeting

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Dated: 12-05-2020
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https://www.coursehero.com/file/63705794/Farhan-Ali-BF-Assignment-2Tata-consultancy-Servicespdf/
 Tata Consultancy Services (TCS)
TATA Consultancy Services Limited is the subsidiary of Tata group and it is India’s largest
information technology corporation which function in more than 149 locations and 46 countries
around the globe. It has headquarter in Mumbai, Maharashtra, India.

TCS Performance before COVID-19

Tata Consultancy services forecast and publish its financial reports on quarter basis. TCS reported
its Quarter 3 Fiscal year 2019-20 financial results on January 17, 2020. These reports shows overall
company performance. For the Quarter three TCS has Revenue at $5,586 million with Year on
year growth is 6.4%. Net Income of $1,138 million and Earnings per Share at $0.3. Along with
this Company has Net Cash from Operations at 116.4% of Net Income. TCS paid ₹5.00 dividend
per share. These financial performance shows company is in good financial position with growth
in various business units i-e Europe (+15.9% YoY), LSHC (+17.1% YoY). Furthermore the Chief

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Executive commented on the performance of quarter three that company has continuous growth in

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quartier three as of the year. He added that company is continue to invest in organic talent

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development customers.

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When it comes to forecasting and planning of the company at the every quarter company have
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detailed meeting in which various next quarter plans are discussed followed by question answer
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section. Most of time TCS do planning and forecast on the basis of previous or current quarter
growth and revenues and design next quarter action plan accordingly.
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TCS Performance after COVID-19

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On April 16, 2020 20:00 hours TCS has done Q4 FY20 Earnings Conference Call. In this
Conference meeting Chief executive Rajesh Gopinathan said that even the Pandemic occur at the
end of Quarter four but have influenced badly the overall performance of the company as well as
future perspectives of the company. Q4 revenue growth was As per quarter reports Tcs has revenue
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of $5.44 billion which is YoY growth of 0.9%.and 3% year-on-year on a constant currency basis.
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Operating margin for the quarter was flat YoY at 25.1% and net margins in Q4 was at 20.2%. And
cash conversion continues to be strong. Overall margins in Q4 were impacted and has dawdling
growth and also has lower exploitation in projects because of either company not received or
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delayed customer approvals for work from home

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As the pandemic has impacted less in quarter four because it started at the end of quarter four.
Overall financial impact can be viewed in next quarter financial performance. But still we can see
that pandemic has reduced company performance by reducing revenue growth from 6.4% to 0.9%
year on year basis and other financial measures. This situation is going to be worse even in the
next quarter
When it comes to Financial forecasting and planning TCS is now no more considering previous
quarter growth and performance to forecast future and design planning rather Tata consultancy
service limited is going for business model changes to address the pandemic challenge. TCs is
very much uncertain about growth and future prospects

https://www.coursehero.com/file/63705794/Farhan-Ali-BF-Assignment-2Tata-consultancy-Servicespdf/
 Shift in Company Budgets and Forecasts to address the problems
Conclusively COVID-19 hit badly the performance of the Tata consultancy service limited
dropping revenue growth form 6.4% to 0.9% year on year basis even the influence was in end of
quarter four. In next quartier the damage will be much higher in terms of financial ratios and
business operations. This pandemic has reduced performance of few units that are operating in
Europe.
This pandemic has cause the challenge to the overall business model of the company and pushing
it toward online platform Close to 90% of employees have now been enabled to work in the
Secured Borderless Workspace infrastructure model (SBWS model).
Tata group increased corporate social responsibility budges to help the people around the group.
AS Tata Consultancy had vowed over US$ 200 million to protect and empower all affected
communities, working closely with governments and institutional partners.

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Company enhanced budgets for Cloud based monitoring system to track progress of all

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organizational functions in order to ensure high quality customer delivery experience

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How the uncertainties should be addressed in annual budget
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Uncertainties can be addressed in annual budgets by incorporating special expense accounts or by
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adding disclaimers to highlight uncertainties and costs of uncertainties. This can be done on
yearend financial statements but better to show on Quarter statement in order to highlight uncertain
costs specific to quarter.
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https://www.coursehero.com/file/63705794/Farhan-Ali-BF-Assignment-2Tata-consultancy-Servicespdf/
 References
https://www.tcs.com/
https://www.tcs.com/tcs-financial-results-q3-fy-2020
https://www.tcs.com/content/dam/tcs/investor-relations/financial-statements/2019-
20/q4/Management%20Commentary/Transcript%20of%20the%20Q4%202019-
20%20Earnings%20Conference%20Call%20held%20at%202000%20hrs%20IST%20on%20Apr
il%2016,%202020.pdf
https://www.tcs.com/company-overview/tcs-response-covid-19
https://www.jstor.org/stable/2490545?seq=1

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