TCS signs deal with M&S; expects $1 billion retail sector business in UK, Europe to outgrow company revenues

TCS expects the USD 1 billion retail sector business in the UK, Europe to outpace the company’s overall revenue growth on the back of strong demand for IT services, a senior official has said.

The country’s largest software exporter on Wednesday announced a multi-year, multi-million dollar deal with Marks & Spencer, with which it has been working for over a decade, to transform the British retailer’s human resource operations. The company’s business head of retail in Europe, Abhijit Niyogi, told PTI that the demand for IT services remains strong in Europe and the UK despite macro headwinds like inflation, rate tightening, political turmoil in the UK and the ongoing Russian invasion of Ukraine.

Stating that the business headed by him has a topline contribution of over USD 1 billion a year, Niyogi said it has been clocking a revenue growth faster than the one reported by the company on an overall basis for the last two-three quarters. Around 10-15 per cent of the company’s reported total contract value (TCV) comes from the business. At present, it is chasing mid to large-size deals having a revenue possibility of around USD 300 million, as demand from retailers continues in the market.

When asked if he sees the business continuing to outpace the company’s broader revenue growth, Niyogi replied in the affirmative. “At least in FY23, I don’t see any slowdown specifically at the back of a very strong Q1. What we see for Q2 and Q3, the pipeline is very strong, the conversion ratio is also quite good, and the demand is at an all-time high,” he added. In the first quarter of the fiscal, TCS reported a 10.2 per cent growth in revenues to USD 6.7 billion, and the retail sector led the pack with over 25 per cent growth in revenues on a constant-currency basis.