From Infosys to HCL, employee costs are squeezing IT margins. So, why is TCS setting its bar high?

By Naomi Gleit On Apr 25, 2022

Rajesh Gopinathan, chief executive and managing director, Tata Consultancy Services (TCS) announcing the Q4 results of the company in Mumbai on April 11, 2022.

Synopsis

Lower margins have been the name of the game for the IT sector. TCS, Infosys, and HCL Technologies, which have reported results, posted lower than the targeted margins. Against this backdrop, why is TCS sticking to a target that is certainly going to be hard to achieve and should effectively be shelved for the near term?

Every quarter, Tata Consultancy Services (TCS) faces down questions about its prospects. Unlike its smaller rivals, India’s largest IT-services company does not issue any guidance for the quarter or year ahead, restricting itself to vague statements about the demand environment.The only long-term number TCS is willing to discuss is its margin. For over a decade, TCS had targeted an operating margin band of 26%-28%. This is not guidance, the

Apr 25, 2022, 07:22 AM IST

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From Infosys to HCL, employee costs are squeezing IT margins. So, why is TCS setting its bar high?

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