New Delhi: Tata Consultancy Services (TCS) Ltd’s quarterly earnings from the financial sector have edged past that of Accenture Plc, which is nearly double its size, making the Mumbai-based company the world’s largest pure-play information technology (IT) and consulting firm servicing mega banks and insurers.

Financial services sector is the largest buyer of services and solutions from IT and consulting firms, and in the last decade, Accenture has managed to retain its sectoral dominance.

During the July-September period, TCS got $2.07 billion in business from banking, financial services and insurance, or the BFSI sector. This included $1.63 billion from work across application development and maintenance, and other traditional solution offerings, besides $445.9 million from its proprietary platforms such as TCS BaNCS.

Accenture, which follows a September-August financial year, got $2.01 billion in business from banking and insurance customers in the June-August period.

Put another way, TCS’s BFSI vertical, if carved out as an independent unit, will be larger than India’s third largest IT services firm, HCL Technologies Ltd, which ended with $2.05 billion in revenue in the April-June quarter.

“In the last quarter, we became the number one pure-play IT services firm servicing the banking and financial services sector across the world," TCS’s chief operating officer, N. Ganapathy Subramaniam, said in an interview last week. “This is very heartening to see we are doing well, and the way we are shaping the industry."

TCS ended with $5.21 billion in revenue in the September quarter, recording 10% growth, while Accenture ended with $10.1 billion in the August quarter, up 11% from the year-ago period. However, TCS’s BFSI vertical saw 9.3% year-on-year growth, while Accenture managed just about 3.1% growth in the latest quarter.

TCS overtaking Accenture is largely on account of the two mega (over $1 billion multi-year IT) contracts, including an over $2 billion, 10-year contract with Transamerica Life Insurance Co., a unit of Dutch insurer Aegon NV, and a $1.36 billion, 10-year contract from a unit of British insurer Prudential Plc. Both contracts saw TCS deploying its BaNCS platform. Expectedly, TCS’s platforms business reported a 26.65% jump in revenue in the September quarter from the year-ago period.

“TCS’s Business 4.0, Digital, Machine First Delivery Model, cybersecurity solutions and the BFSI specific offerings have combined to take them over the top," said Ray Wang, founder of Constellation Research, a technology research and advisory firm. “This is seen in the number of $50 million clients added in the financial sector by TCS."

During the September quarter, both TCS and its rival Infosys Ltd reported an impressive growth in demand from clients in the financial space, making one analyst conclude that the industry is seeing an uptick in demand.

“We think growth in both INFY (Infosys) and TCS’s financial services vertical indicates that the industry is rebounding, but we continue to believe that CTSH (Cognizant Technology Solutions Corp.) has a weak financial services client mix, and thus we do not think it will rebound to the same extent as competitors," Keith Bachman, an analyst with BMO Capital Markets, wrote in a note dated 16 October.

Still, it is sketchy for now if TCS is winning at the expense of smaller competitors or if it is the beneficiary of renewed spending on technology from some of the largest banks as over the last few years, many banks had put their tech spends on hold.

Wang of Constellation believes that TCS’s faster growth in the last 12 months is both on account of the company benefitting from new tech spend in digital areas by banks and the company displacing a few incumbent vendors.

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