Not much difference in BSNL deal revenue in Q3 from previous quarter, says TCS CEO K Krithivasan

TCS CEO and MD K Krithivasan,

Tata Consultancy Services (TCS) chief executive officer and managing director K Krithivasan said that there were no revenue growth headwinds from the Rs 15,000-crore Bharat Sanchar Nigam Limited (BSNL) project in the third quarter and it will only start to taper in the upcoming quarters.

In the previous quarters, the BSNL project has been key to the company's quarterly growth, especially in India region. Sequentially, the company's Q3 revenue was down 0.45 percent at Rs 63,973 crore.

TCS is aiming to complete the project by Q4 or Q1FY26 and some parts in Q2, when the quarterly revenue coming from the deal will also start to slowdown, said Krithivasan. The project has already run past its peak revenue-contribution phase. The company is now looking at various avenues to replace this project and defend revenue performance, the TCS boss said.

The government telco’s deal was a shot in the arm for the country’s largest software exporter in 2023. It has been contributing steadily to its quarterly revenue growth amid uncertain macro environment for the IT sector.

TCS was tasked to deploy 4G network across India for BSNL. It involved establishing data centres and 4G sites across India, while laying the foundation for 5G infrastructure.

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The project was won by a consortium that also includes Tata Group's telecom gear-making company Tejas Networks, responsible for supplying and servicing the Radio Access Networks (RAN) equipment.

Speaking to Moneycontrol, Krithivasan said that almost “70,000 sites have been installed, and 60,000 of them are already carrying commercial traffic.”

“Between Q2 and Q3, there was not a substantial difference in our BSNL revenue. We should see the BSNL revenue tapering down, going forward. We seek to replace that revenue either through other international new projects, the new entry series that we have won, or increasing the revenue through regional markets. We continue to look at opportunities through which we can replace this revenue.”

The TCS CEO said while the company is targeting regional markets and even India to find projects to replace some of the revenue, the company will also look at the existing core market such as North America and Europe.

“I'm not saying it's easy or I'm not being flippant about it.  But we are confident that this revenue could be replaced over a period of time,” Krithivasan said.