TCS Corporate Sustainability Report 2010-11 - Tata Consultancy ...

Strategy for long-term growth
TCS’ revenue growth comes from following a multi-pronged strategy built around
(I) expanding our addressable market by geography, by industry and by service-line and
(ii) deepening our client relationships. Key elements of this strategy for sustainable, longerterm
growth are summarized in Figure 10 and explained in greater detail on Pages 19-20
of our FY 2011 Annual Report.
Non-Linear
Business
Models
Financial Sustainability
Strategic
Acquisitions
Customer
Centricity
Strategy for
Long-term
Sustainable
Growth
TM GNDM
Full Services
Capability
Figure 10 Five point strategy for long term growth
Successful execution of our strategy for sustainable growth requires investments in building
capacity, in people and in new business initiatives. The ability to fund these investments either
through internal accruals or from the outside is critical to business sustainability. Happily, TCS’
business model has a financial profile characterized by strong cash generation, low capital needs,
low working capital requirements, negligible debt and very attractive Return on Equity. TCS is a
near zero-debt company, funding its growth entirely through internal accruals. We did not receive
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any significant governmental financial assistance in FY 2011 .
These are structural attributes of our business model, and sustainable going forward. Equally
important, we have a robust risk management framework using which we scan the environment
for potential risks to this sustainability and take mitigative steps. Some of the key attributes of our
financial sustainability are further explored in this section.
Strong Cashflows
The Company’s growth is financed by cash generated from operations. As of March 31, 2011,
Total Shareholder’s Equity stood at $5,657 Mn of which Retained Earnings made up $5,031.5 Mn.
As at March 31, 2011, the Company had cash and cash equivalents of $348.5 Mn (FY10: $228.2 Mn)
and Bank Deposits of $713.2 Mn (FY10: $813.1 Mn). Cashflow from Operations was $1,526.4 Mn.
11 Excluding tax incentives applicable in specific locations
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