With 23.5% volume growth for the financial year 2012 and a robust deal pipeline from the US markets, Tata Consultancy Services? chief financial officer S Mahalingam is confident of the IT spend for the next financial year. He spoke to Shruti Ambavat on how TCS plans to beat the 14% growth projected by IT sector’s trade body National Association of Software and Services Companies. Excerpts:
You have been saying that TCS will beat Nasscom target of growth for the IT industry. How?
We certainly feel we will be able to beat Nasscom?s 14% growth target. We have been consistently performing in all geographies and sectors for the past few quarters. We are no longer an organisation where we can concentrate on just one sector. We understand the dynamics that drive each sector and work along it.
Banking Financial Services and Insurance (BFSI) has seen a flat growth in fourth quarter. Are there any other emerging sectors for TCS?
We are growing well in retail and seeing an uptick in telecom. Manufacturing and hi-tech also look good for the company. Many companies in BFSI are looking at a stack of items under IT that they must do. Technology is catching up with the economy. Clients have reached a position where they can afford to spend more money and fair amount of liquidity is also there. We believe they will be spending the entire budget. They may go slowly in taking decisions but spendings are definitely there. Overall, we see banks being careful but they also seek IT solutions and have given large orders. We are very optimistic about the sector.
What is your take on the other sectors as far as IT spendings are concerned?
Technology trends are driving lot of IT spendings. To a large extent, IT expenditure has become must. There are lot of growth riders as far as retail is concerned. Telecom is another sector that gets affected by the economy but we are getting good vibes from them too. The industry is also ready to spend more on IT.
There are some bids that we are responding to in Europe that have huge requirement for outsourcing. These companies need some order in their outsourcing costs.
How do you expect to sustain 3.3% quarterly volume growth?
There are growth drivers across industries and we are pursuing a lot of opportunities. Hopefully, they will translate into projects. There is a market that exists where we know we can do a lot of work. For example, many of the customers in banking are looking at increasing their spends on outsourcing.
