TCS wins $690-mn IT outsourcing contract
THE LATEST DEAL BRINGS $69 MILLION IN NEW BUSINESS, OR 37 BASIS POINTS INCREMENTAL GROWTH, FOR TCS
BENGALURU: At Tata Consultancy Services Ltd (TCS), it is raining deals. India’ s largest information technology outsourcing company said on Tuesday that it had won a $690-million, 10-year contract from a unit of British insurer Prudential.
The latest order is the third large outsourcing contract won by TCS in less than a month. It won two over $2 billion, multiyear outsourcing contracts from television ratings measurement firm Nielsen and Transamerica Life Insurance Co., a unit of Dutch insurer Aegon NV, in December and earlier this month.
T CS will use its insurance platform, Ba NC Sand Diligent a, the UK-based subsidiary of the company, to largely do away with human intervention sin completing many of the back-end claims processes of M& G Prudential, the European savings and investments business of Prudential.
T CS won the outsourcing contract from Prudential over British IT outsourcing firm, Capita Plc, which was earlier hired by the British insurance giant.
T CS does not outline any quarterly or yearly growth outlook but 1% sequential growth in the March quarter will help it end the current year with $18.95 billion in revenue, a 7.8% dollar revenue increase in 2017-18. This means TCS will need to improve on its current year’s growth by 220 basis points to achieve at least 10% dollar revenue growth in 2018-19.
One basis point is one-hundredth of a percentage point.
The latest deal brings $69 million in new business or 37 basis points incremental growth for TCS.
TCS stands to make over $200 million in new business or more than 110 basis points in incremental growth from the contract with Transamerica. Additional deal wins from a unit of Lloyds Banking Group, Rolls Royce Group, and Marks and Spencer is expected to bring more than $100 million in new business or over 60 basis points incremental growth in the next fiscal, according to Mint’s calculations, together bringing over 200 basis points in incremental growth.