Tata Consultancy Services (TCS) is set to give across-the-board salary increments for 2021-22, thus becoming the first IT services company to do so.

The salary hike is an indication of the robust growth witnessed by the country’s largest IT services firm and its optimism that the good times will continue into the next fiscal year as enterprises adopt technology in a Covid-19 struck world. It also marks a return to the normal increment cycle.

After TCS declared results for the third quarter ended December 31, 2020, Rajesh Gopinathan, chief executive officer and managing director, had said that the company is confident about achieving a double digit revenue growth for the next fiscal.

The salary hike roll-out will benefit close to 4.7 lakh employees of the company. Incidentally, this would be the second salary hike within six months by TCS. Back in October 2020, the firm had hiked salaries by 6-7 per cent and in April, the average increment band is likely to be the same, thus taking the total increment to 12-14 per cent in six months.

Despite the salary hike in October, operating margins of TCS had expanded by 40 basis points, to 26.6 per cent — the highest in the last five years. Because of the increment, its operating margins were affected by 160 basis points. However, a robust growth across geographies and verticals made up for the increase.

A TCS spokesperson confirmed that the company is on track to give increments to all associates across geographies effective April 2021 in line with its benchmarks.

“We are thankful to all our associates for demonstrating resilience, adaptability, and an innovative mindset to steer the company in these trying times. This step is a reflection of our steadfast commitment to our associates,” the spokesperson said.

After the pandemic struck in March last year, several companies were forced to reduce employee salaries and freeze fresh recruitment. However, with the domestic economy recovering from the recession, it is expected that companies in other businesses would also start giving increments to their employees.

During the third quarter, TCS’s revenues grew 4.1 per cent in constant currency, 5.1 per cent in dollar terms and 4.7 per cent in rupee terms on a sequential basis.

Shares of TCS closed higher at Rs 3,063.25 on Friday.