With 12.5% pie, digital is fastest-growing income stream for TCS

Country's largest software firm TCS on Thursday said the digital segment is the fastest-growing revenue stream, accounting for 12.5 per cent of the overall sales of the IT giant which sounded confident of surpassing the $5-billion target in the segment over the next five years.

"Digital is the fastest-growing business vertical now; we have got a huge traction. It occupies for 12.5 per cent of overall revenue on a 'conservative basis," N Chandrasekaran, chief executive and managing director, TCS told reporters after announcing the June quarter results.

The software industry counts social media, mobile, analytics and cloud as the key revenue streams for this fast growing digital segment. This is the first time that TCS has divulged any revenue figure from the digital front.

The company reported a 16.1 per cent revenue growth to Rs 25,668 crore (Rs 256.68 billion) in Q1, while net income inched up 2.10 per cent to Rs 5,684 crore (Rs 56.84 billion) during the April-June period.

During the quarter, there were 38 client additions in the digital segment for the company, he said.

Chandrasekaran, however, declined to give any additional data on the digital front, but promised to share more details as the year progresses.

Going by the 12.5 per cent revenue share as of Q1, the company is set to breach the $2-billion revenue mark from the digital front in the current fiscal.

Asked about last year's statement of clocking $5-billion revenue from the digital segment in five years, and if the company will surpass that, Chandrasekaran said, "in all likelihood".

On the possibilities of creating a special vertical for this segment, he replied in the negative, saying digital pervades all the existing revenue streams and in a few years, it will be difficult to distinguish digital work from the rest.

Chandrasekaran reiterated that the company is training 1 lakh employees, just under a third of its workforce, in digital skills this year.

The training will be given to employees from across the board and each sector will require a different set of competencies, he said, calling it a "big investment" for the company.