Tata Consultancy Services Ltd Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kumar Rakesh - BNP Paribas, Research Division - Analyst : Just an extension of the generate AI discussion you were having just now. So while you definitely talked a lot about the demand opportunity for the customers, I understand you are also running multiple projects internally as well to assess their augmented processes, how they are going to save cost or productivity or you -- can you share some of the details on that? And is there a possibility that our own productivity benefits within TCS would start growing much ahead of the revenue opportunity from general AI comes through eventually? N. Ganapathy Subramaniam Rakesh, It's NGS again. And it's difficult to call out some of this, but sufficient to say that there are multiple teams almost every vertical that we have. Their pilots, their internal projects and how do we craft the methodologies and toolkits to be meaningful to our clients using this technology. All this is going on. And as we called out earlier, there are at least about 50 projects that we are executing. Some are small, some are large. And I think one of the nice things to say is that, look, if a particular organization has an ability to predict on our 2 parameters, which will create a maximum business impact for them. If that can be focused upon using this technology, I think that will create maximum impact. I mentioned about, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 12, 2023 / 1:30PM, TCS.NS - Q1 2024 Tata Consultancy Services Ltd Earnings Call for example, if someone can predict, if the technology can predict, let's say, the container price 3 quarters down the line, then it could be a boon for the shipping industry. So it's problems such as that. And how do you improve or increase the yield of agriculture commodities. Some of these things and specifically matching with the climate technologies or climate parameters that one has, which will have everyone predicting features. All will contribute to the impact disciplinary nature of the solutions that we need to deliver. So there's a lot of work going on in the industry and within the research and innovation team of TCS. I think we're couple of quarters down the line, maybe we'll be able to give you more...

Question: Ravi Menon - Macquarie Research - Analyst : Sir, the last quarter you spoke about an increase in on-site cost and normally that refers to some new product starts. So the current quarter's revenue performance has not been much traction with new projects. So how should we think about the puts and takes in terms of new contract starts and pressure on existing business over this quarter?

Question: Ravi Menon - Macquarie Research - Analyst : Yes. I mean how should we think about the puts and takes between new project starts and pressure on existing business over this quarter?

Question: Ravi Menon - Macquarie Research - Analyst : The next one is on pressure hiring. It's like -- so was there any pressure hiring this quarter or also recruitment mostly natural to backfill that ratio? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 12, 2023 / 1:30PM, TCS.NS - Q1 2024 Tata Consultancy Services Ltd Earnings Call

Question: Ravi Menon - Macquarie Research - Analyst : And let me try one more time about this first question. So I was asking about last quarter's increase in on-site cost and whether that was due to new project starts and have we continued to see new project starts over this quarter? Or -- and that kind of got offset by some pressure on the book of existing business? Or we didn't really see any new project starts, and that's why we kind of flat quarter-on-quarter in CC terms?

Question: Ravi Menon - Macquarie Research - Analyst : Let me ask one more follow-up if I may add is this defers the sort of contracts. Is this due to this whole change in model to Agile versus Waterfall? Is that causing people to be able to take this pause and then versus, say, earlier you would really have? For any deliverable, there would be months probably still to go. So you could really halt everything a bit flight. And now it makes it a lot easier to put these pauses?

Question: Vibhor Singhal - Nuvama Wealth Management Limited, Research Division - Analyst : Maybe just one question from my side on the 2 segments that we have seen quite contrasting performance in the past few quarters. So manufacturing has held up quite well for us and not just for us, I think, for all the companies across the industry. It's been quite stable in terms of growth. Even in this quarter, we almost had double-digit growth on a Y-o-Y basis. So what is keeping this spend up in the manufacturing segment? And are we not facing the kind of delays that we are facing in let's say BFS or a vertical in the manufacturing segment? And do you think that manufacturing might continue to remain stable in the coming quarters as well? And a similar kind of opinion about Retail. So in Retail, we had seen a lot of weakness in the past couple of quarters and again, not just for us, for the entire industry. Are there any signs of that segment bottoming out, if not today, maybe in a couple of quarters' time. Just a little bit of color around both these 2 verticals. N. Ganapathy Subramaniam Manufacturing is doing well because of the low base and the delay -- delayed pickup in demand and growth compared to other industries. And as a supply chain situation also eases slowly. They are able to also see their growth and [sales]. Today, you see the demand is still high for many of the automakers. I think that's probably driving it. And again, I won't be able to say how long this would last because it will eventually be a function of the overall economy. On Retail, our view is or what we see, the essential Retail is doing well. But if it is luxury or fashion or rather specialty Retail, you find that there is a softness in demand in such kind of -- such subsegment of the industry. So that's the broad color we can provide you on this. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 12, 2023 / 1:30PM, TCS.NS - Q1 2024 Tata Consultancy Services Ltd Earnings Call