Information technology behemoth Tata Consultancy Services (TCS) aims to focus more on emerging markets as part of its long-term growth strategy, at a time when demand from two of its largest markets –US and Europe- remains muted.
These regions include India, Asia-Pacific (APAC), Latin America, and the Middle East and Africa, as the company believes these markets will become sustainable drivers of long-term growth.
"A scalable presence in these markets is likely to provide the muscle for growth in TCS' overall business over the next couple of decades," the management said during post earnings conference call on October 10.
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At a time when overall growth is tepid because of macroeconomic issues in its key market, India has emerged as a face-saver for TCS. India led with an impressive growth rate of 95.2 percent year-on-year (YoY) in constant currency (CC) terms, followed by the Middle East and Africa at 7.9 percent, Asia Pacific at 7.5 percent, and Latin America at 6.8 percent.
In comparison, the North American region, which contributes almost 50 percent to the revenue share, declined by over 2 percent in Q2.
Even in the last quarter, demand was led by the India market, growing by over 61 percent YoY in CC terms.
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This India growth story is being partly led by the banking platform, which now serves a diverse range of banking institutions, from commercial and urban cooperative banks to rural, private, and small financial banks.
"With an installed base of close to 200 banking institutions in India, we continue to help our customers to transform and achieve their goals of digitisation and become active players in the thriving ecosystem of Indian markets," the management added.
Meanwhile, there is some softness in the UK and Europe due to a specific client situation, as noted by TCS. However, the overall BFSI sector is expected to continue growing, the company said. "While a few other verticals have been soft in Europe, the growth of BFSI has helped in overall Europe growth as well," TCS said.
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