TCS Terminates $2 Billion Deal with Transamerica Life Insurance Company
India’s largest IT services company, Tata Consultancy Services (TCS), has terminated its $2 billion deal with Transamerica Life Insurance Company. The agreement was signed in January 2018 and was expected to ensure TCS received an annual revenue of at least $200 million. However, TCS has blamed the global recession for the termination of the deal. The news has impacted the company’s stock, which has fallen heavily, with TCS share rate down by about Rs 40 today.
TCS has stated that it will work with Transamerica to create a new servicing model, which will take at least 30 months to complete. For the financial year 2022-23, TCS projects a 14.8% YoY growth in gross net profit at Rs 11,392 crore for the quarter ended March 31, 2023.
Meanwhile, TCS’s income from operations has increased by 16.9% to Rs 59,162 crore from Rs 50,591 crore. K Krithivasan has started his work as the new CEO from 1 June 2023.
In conclusion, TCS’s termination of the $2 billion deal with Transamerica Life Insurance Company is a significant development. The company has attributed the termination to the global recession and has stated that it will work with Transamerica to create a new servicing model. However, this work is expected to take at least 30 months.
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