12 May 2008 TCS Analyst Day, New York

Profitable Growth Through Financial LeadershipS. MahalingamExecutive Director & Chief Financial Officer

12 May 2008

• Sustaining Growth– Lingering global economic outlook– Troubled banking sector

• Maintaining Profitability– Salary inflation

– Flattish pricing environment

– Funding investments for future growth

Top Investor Concerns

12 May 2008

Sustaining Growth - Changing Profile Of TCS’ BusinessRevenue by Geography

Diversification provides protection from a slowdownDiversification provides protection from a slowdown

FY02

Revenue: $0.9 bn

FY08

Revenue: $5.7 bn

Continental Europe

9.2%

MEA1.7%

India9.0% North

America50.7%

UK19.8%

Ibero America4.4%

Asia Pacific5.2%

Americas61.1%

Europe & UK20.7%

Others6.3%

India11.9%

12 May 2008

Sustaining Growth - Changing Profile of TCS’ BusinessRevenue by Service Practice

Diversification provides protection from a slowdownDiversification provides protection from a slowdown

FY02

Revenue: $0.9 bn

FY08

Revenue: $5.7 bn

ADM & EIS87.3%

Enterprise Solutions & BI

10.8%

Asset Leveraged Solutions

1.6%

Others0.3%

ADM48.3%

BI9.7%

Asset Leveraged Solutions

3.6%

Assurance3.7%

EIS5.4%

Infrastructure Services

6.5%

Consulting3.4%

BPO 6.2%

Enterprise Solutions

13.1%

12 May 2008

Headwinds

Wages (316 bp)

Rupee Appreciation (415 bp)

Investments in Future Growth

• Global Structure• New SEZ sites• Headcount additions for FY'09 growth• Platform based BPO• Products Business- TCS Financial Solutions• Small & Medium Business Initiative

2008: A Challenging Year

12 May 2008

Headwinds Largely Offset

Pricing 6.58%

Off shore Leverage 0.35%

Hedge Program 1.95%

Net Impact : Net Income

2008 21.95%

2007 22.17%

2008: A Challenging Year

12 May 2008

Revenue• + 2.9% Q/Q• Delay in expected project starts

Margins• Operating Margin: 22.8%• Net Margin: 20.6%• Continue to invest for future growth

– Headcount additions to drive FY 2009 growth– Infrastructure– Project transition

2008: Q4 A Challenging Quarter

12 May 2008

Environment• Rupee: Stable• Pricing: Stable with upward bias

Demand• Robust over full year, though sluggish near term• Significant opportunities to assist clients:

– Transformation projects– Cost rationalizations– Vendor consolidations

2009: Looking Ahead

12 May 2008

• Utilization

• Offshore Leverage

• SG&A Cost Management

• Employee Cost Control

2009: Focus On Operational Excellence To Maximize Profitability

12 May 2008

Utilization Offshore Leverage SG&A Cost Mgmt Employee Cost Control

2009: Focus On Operational Excellence To Maximize Profitability

• Average utilization range: 78% - 80%

• FY 2009: Higher utilization rate to improve margins

12 May 2008

• Moving towards 45% revenue from offshore• Positive impact on operating margin: up to 25 bps from each percentage point shift offshore

Utilization Offshore Leverage SG&A Cost Mgmt Employee Cost Control

Offshore Revenue and Impact on Operating Margins

Impact on Operating Margins (RHS)Offshore Revenues

100 bps 125 bps

(50 bps)

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

-100 bps

0 bps

100 bps

200 bps

300 bps

400 bps

500 bps

FY05 FY06 FY08FY07

35 bps

2009: Focus On Operational Excellence To Maximize Profitability

12 May 2008

Utilization Offshore Leverage SG&A Cost Mgmt Employee Cost Control

Focus on cost management actions

• FY 2008: Active cost control program– 65 bps cost improvement without Rupee appreciation

• FY 2009: On-going programs– Shift of selling costs to low cost locations, where possible– Cost management programs, including communications– Improved utilization, lowering bench costs

2009: Focus On Operational Excellence To Maximize Profitability

12 May 2008

Utilization Offshore Leverage SG&A Cost Mgmt Employee Cost Control

Employee Cost Control• Annual wage increase held to 10%

– About 250 bp impact vs. 316 bp impact in FY 2008

• Broaden pyramid– Shift in Fresher/Lateral hiring ratio

• From 45/55 in FY2008 to 60/40 in FY2009

2009: Focus On Operational Excellence To Maximize Profitability

12 May 2008

FY06

INR m % of Revenue

25.6%

21.8%

132,455

33,894

28,831

FY08

INR m

228,614

53,651

50,191

FY07

INR m % of Revenue

% of Revenue

Revenue 186,332

Operating Income 46,444 24.9% 23.5%

Net Income 41,315 22.2% 22.0%

Sustaining Profitable Growth

• FY 2008 Operating Margin:

– 24.6% adding back FX gain in Other Income

– 25.6% without Rupee appreciation

12 May 2008

• Well-poised to sustain strong growth– Markets, Service Offerings and Delivery Locations are diversified

• Focused on maximizing profitability

– Utilization

– Offshore Shift

– SG&A Cost Management

– Employee Cost Management

– Maturing of Strategic Initiatives

In Summary …

12 May 2008 TCS Analyst Day, New York

Profitable Growth Through Financial LeadershipS. MahalingamExecutive Director & Chief Financial Officer