TCS reiterates growth momentum in BFS vertical

Tata Consultancy Services (TCS) today in a statement said that all is well in its biggest vertical banking and finance vertical.

The company in a statement to the exchanges said the segment continues to grow and is ahead of its overall performance. The company said it wanted to allay market fears on demand in this vertical.

NASDAQ listed IT services firm Cognizant, which announced its results yesterday, has a soft guidance for the first quarter. The company cited softness in the BFS space due to macroeconomic concerns.

BFS is part of TCS’ BFSI (incl insurance) vertical. Over the last year BFS+I growth has slowed from 14% ccYY in Mar-15 to 10% ccYY- but mainly due to decline in its Diligenta (UK insurance business), said a CLSA report.

TCS also shared that its BFS vertical grew 15% ccYY in CY15 ahead of company growth of 13.5% ccYY for year ending Dec-15.

"Our deep domain expertise, our investments in digital, our software products in the BFS vertical combined with our capabilities in operations and technology presents a very compelling, full suite of services to customers, harnessing the power of digital technologies to solve their business problems and deliver real value," said N Chandrasekaran, CEO and MD, TCS.

The company also stated that its absolute incremental revenues in cc were $2bn and organic cc inc revenues were $1.85bn – highest in industry for CY15.

Cognizant’s increment revenues were $1.65-1.68 billion.  

"TCS also mentioned that they are perhaps gaining market share against peers that are calling for slowing BFS spending and their largest clients are stable. TCS’ commentary also seemed to suggest Infosys is doing well. We reiterate the view that Infy probably is also gaining share. This reiterates with the commentary from our channel checks that suggests TCS, Infy win rates are stable and the market isn’t slowing down further," said a CLSA report.