Tata Consultancy Services (TCS) is reportedly planning to increase salaries by an average of 7-8% for its offsite employees and 2-4% for its onsite staffers in 2024-25. According to an exclusive report in Business Standard, high performers can expect an increment of 12-15 per cent. India's largest IT company TCS had a headcount of 603,305 as of December 31, 2023.
According to an unnamed source cited by BS report, the Indian IT giant will be scrutinizing the promotion process closely, potentially delaying it until the first quarter of the fiscal year 2024-2025.
The salary increments, however, are expected to be effective from April 1, 2024. "The salary increment process is nearing completion, but promotions, especially at the higher levels, are under strict scrutiny due to cost considerations," the source revealed. Typically, IT companies announce salary hikes during the first quarter of the financial year.
In an email response to the publication, TCS spokesperson said that the company, as per its policy, cannot comment on speculation.”
In FY24, TCS reportedly gave salary hikes largely in the 6-9 per cent range, with high performers receiving increases of 12-15 per cent. Top performers in the junior cadre are said to have received a raise of 10-11 per cent in FY24, a trend that is likely to continue into FY25
TCS to lead rivals in revenue growth
Foreign brokerage UBS recently said in a report that TCS is likely to lead its peers in revenue growth by 100-150 bp along with improvement in margins in FY25. “We believe the market is not pricing this in, given a divided consensus and the stock remaining at the lower end of its long-term trading premium vs peers," UBS said as it upgraded TCS.
“We see enough drivers to believe TCS can deliver industry-leading growth and margins among peers in FY25," UBS said.
These include ramp-up of large deals, revival in the BFSI segment, revival in cloud migration projects; and continued managed services demand strength at industry level.
“On the margin front, we expect a sharp fall in attrition to aid in gross margins with some lag, a potential 200 bp additional improvement in utilisation, and scope for subcontracting cost reductions. Our two-factor regression model suggests gross margin can expand by more than 100 bp in the next four to six quarters," UBS said in the report.
