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TCS rewarded shareholders with 3,000% return on investments: Chandrasekaran – Business Standard

N Chandrasekaran, chairman, Tata Consultancy Services (TCS) said that the company has weathered the pandemic very well, and has earned tremendous goodwill from customers and enhanced the firms standing in the market. He said this while virtually addressing the 26th Annual General Meeting of the company.
Chandrasekaran also said that while COVID has disrupted life it has also brought positive changes and many opportunities for TCS. For instance, adoption of digital has been accelerated tremendously, “Almost a decade of advantage has come in because the world is shifting to digital,” he further added that, “COVID is going to impose sustainability in a big way. All companies will be moving toward adopting this.”

And finally global supply chains are getting redesigned as not just-in-time but also just-in-case, “this means focus on resilience and all these are providing significant opportunity for TCS,” said Chandrasekaran.

Chandrasekaran also expressed his deep gratitude towards the founder and CEO of TCS for 27 years, F C Kohli. “Shri. Kohli is a true legend who laid the very foundations for India’s spectacular IT revolution and set the stage for the dynamic modern economy. I express a deep gratitude to his indefatigable, influential spirit for shaping TCS and the fabric of TCS culture.”

He also shared that TCS shareholders saw over 3,000 per cent return on their investments since the company listed in 2004. “If you would have invested Rs 850 per share in the IPO of 2004, the value of that investment today, after a period of 17 years, would be Rs 28,000. A return of over 3,000 per cent,” shared Chandrasekaran with shareholders.

On the performance of the company, Chandrasekaran said that barring the first quarter of the fiscal, the company has recovered to deliver a sharp recovery. For FY21, TCS has returned Rs 33,873 crore in dividends and buyback to shareholders, resulting in a payout of 95 per cent of free cash flow.

He also said that TCS has contributed Rs 273 crore towards COIVD-19 relief work. This includes building capacity for 200 doctors across 22 hospitals, 2.5 million meals were distriuted to doctors and medical professionals. TCS also trained health workers and spread awareness among rural population ensuring wellness of over 450,000 people.

Rajesh Gopinathan, CEO and MD said: “Our history of profitable growth continues and over the last 5 years we have grown on an annual rate of 8.6% growing from Rs 117,966 crore in FY17 to Rs 164,177 crore in the year FY21. Through these years we have maintained our profitability going from 25.7% operating margin in the year FY17 to 25.9% FY21. In terms of total cash generated. We continued our shareholder-friendly capital allocation policies and of the total cash generated is 82.6% in the form of shareholder payouts, spending 7.5% on Capex, and 9.7% which we have kept as surplus invested funds.”

Gopinathan also said that the nature of technology investments is the start of a multi-year technology upgradation cycle.

“Our Research & Innovation methods are catalyzing the G&T Engagements. We now have more than 6,000 researchers, inventors and innovators working in TCS, who collectively produced more than 240 papers and filed 5879 patents of which we have been granted 1850 patents. We work not just within TCS but also with our extended ecosystem of 67 academic partners, 2,400 start-ups to bring together, into our coinnovation network. TCS’ own innovation expands in more than 30 innovation labs and 5 TCS Pace TM ports located across the world. In all, we invested 1.2% of our revenue in our Research & Innovation efforts this year adding to ₹1,917 crores invested in research and innovation in the year ending on 31st March, 2021,” shared Gopinathan.