TCS eyes inorganic means to drive global growth in the near future

16 April 2019 2 min. read

In a bid to continue along its rapid growth trajectory, Indian IT services giant Tata Consultancy Services (TCS) has indicated that it is on the lookout for strategic acquisitions across the globe, with the ballooning startup environment in India being one promising source for inorganic growth.

This year, TCS has emerged as the fastest growing IT services firm in the world, not least due to a series of partnerships and acquisitions that it made across the globe last year. After a landmark year, the firm rounded off a successful 2018 with the acquisition of a management consultancy by the name of BridgePoint Group based in Georgia, USA.

BridgePoint was the second major acquisition of the month, the first being W12 Studios in London, which represented a move to strengthen its capabilities in the digital design space. Nevertheless, compared to other Indian IT services firms, TCS’ growth has been relatively organic in nature.

The firm won a $2 billion contract with US-based financial services firm Transamerica last year, in addition to several other strategic partnerships signed across the globe. Now, Chief Operating Officer at TCS N Ganapathy Subramaniam has indicated that the focus is likely to shift to inorganic growth.

TCS eyes inorganic means to drive global growth in the near future

Consistent with general trends across the Indian IT services industry, the firm has been developing its capacity in a number of industry 4.0 domains, including blockchain, where the firm has made substantial investments in recent months. Firms that are strong in that domain will be high on TCS’ target list.

In India, a combination of widespread digital expertise and enabling government policies are creating a budding startup environment, which matches TCS’ goals perfectly. According to Subramaniam, each acquisition “has to make sense in terms of both value and the combined value of TCS and the asset that we are acquiring should really be great.”

“Some of the startups are doing very well, blockchain is an area where lot of firms have come up. There are many who are working on future of financial services, future of cash, future of payments... so we continue to watch closely some of those technologies and startup firms, how their business models are emerging.”

“We continue to remain open and hungry for acquisitions. We have one of the best track records in terms of acquiring companies and integrating them... the approach is that clearly, we are in the market looking for the right asset which will add certain amount of IP (intellectual property), market reach or client addition,” he added.