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TCS net profit rises by 22.6%, bags Rs 7,901 crore in Q2FY19; BFSI boosts earningsIn the on-going spat of Mistry vs Tatas, the ousted chairman has hit back with a five page response on Tuesday to Tata Sons’ remarks on how Mistry made no material contributions to the success of Tata Consultancy Services (TCS) and Jaguar Land Rover (JLR).
Mistry said that his primary involvement with TCS was focused on future-proofing TCS strategy and helping fortify their relationships at the C-Suite level by leveraging the strength of the Tata Group.
Adding that he was the one that flagged the importance of TCS to the Tata Sons board Mistry said that he also strengthened other group companies.
Mistry stressed on the importance of ‘leadership’ companies like Tata Chemicals, Tata Elxsi, TGBL, Titan, and Voltas, to name just a few, are all leaders in their respective fields.
Mistry said he was influential in connecting TCS with major stakeholders across the world.
“For TCS to flourish, it was vital that TCS transformed from an IT solutions provider to a strategic partner because the digital imperative had become a strategic differentiator for many organizations. Consequently, the client relationship needed to move from engaging with the CIO (with whom traditionally Indian IT company CEOs maintained their relationship) to the CEO,” Mistry said.
Mistry said that he had met with at least 60 global CEOs over the past three years some along with TCS leadership, to reinforce the capabilities of TCS for organizations to co-innovate in the digital world.
Stressing his importance in skill upgradation, Mistry said, “Just last year, TCS had undertaken one of the largest skill upgradation programs in corporate history. Over 135,000 people have been trained to be ready for the new digital world.”
Pointing out that one of the main objectives of him coming on board with TCS was to focus on reducing the gap between cash and profits, Mistry said, “Acquisition of companies with capabilities in these spaces and others required TCS to have available a reservoir of cash.”
“Mr. Chandrasekaran and his team responded splendidly, improving the cash conversion cycle from 49% in 2012 to 92% in 2015. The improved performance enabled TCS to declare a special dividend without compromising firepower for acquisitions. Cash and cash equivalents doubled over the same period to Rs. 20,500 crores,” Mistry said.
Further Mistry entailed how he travelled to US and Europe to attend summits and how he engaged with employees at TCS centres in India and engaged in the company’s innovation and design centres.
On his association with JLR, Tata Motor’s wholly owned subsidiary, Mistry said he had spent over 120 days including 38 days on JLR design review, 56 days on offsite strategy meetings as well as market visits to dealers in China, USA, and India, excluding the time spent in board and budget meetings.
Mistry said that JLR’s strategy under his leadership had been to achieve scale as well as minimize currency and supply chain risks by investing in new facilities. Its lack of scale required it to invest disproportionately compared to the industry in new technologies that will help meet the regulatory requirements and differentiate its products.
“This has been done without leveraging the balance sheet and retaining adequate liquidity.The result is a stronger company that will reward the shareholders more consistently in the future,” Mistry said.
