Amid apprehensions about fall-out of Brexit and the US presidential election on the outsourcing industry, India’s largest software exporter TCS today dismissed possibility of adverse impact.
“I don’t see our business getting impacted by the outcomes of the US elections (if the Republican Pary’s Donald Trump wins) or due to the British move to begin their exit from the European Union from March, because technology investments will continue to take place as companies know the positive outcomes of that,” TCS chief N Chandrasekaran said while announcing the second quarter numbers.
“Maybe companies will delay their investments in technologies for a while, but they will continue to invest in technology and into the digital space,” he said.
He, however, quickly added that “having said that let me explain that I don’t have any concrete idea as to how these events may impact these economies as well as the global economies on a macro level. If the impacts are negative as many fear, then definitely there we too will be hit.
“But I have no indication as of now from my client interactions that they have any plans to stop investing in technologies,” the TCS chief said.
Incidentally, Chandrasekaran also said for TCS, which desists from offering guidance traditionally, the next two quarters will be best in many years saying many of the delayed contracts will be executed during the second half.
Trump has threatened to end outsourcing and put up many trade protectionist measures if elected to the White House.
The US is the largest market for the domestic software exporters.
Also, British Prime Minister Theresa May had said she would begin the Brexit process in a hard manner from March. TCS has already reported a marginal dip in its income from Britain in the reporting quarter due to the massive plunge in the pound.
London is the financial capital of Europe where all the leading banks and financial institutions are based.
On this, Chandrasekaran said even though we have been facing softness from the BFSI clients for some time, “this, to me is true even of banking and financial sector clients, which has been soft in the reporting quarter and expects to be so in the remaining parts of the current fiscal year. Maybe there will some temporary impact on the BFSI spending.
“I see a tendency for everyone to connect the not-so-good numbers from the BFSI clients to the Brexit and the US polls. As of now there is no structural issues with our BFSI clients, but only some client-specific seasonal delays. Nor I have so far got any such indications. Similar is the case with a Trump win as well, as tech investment is a necessity now.
“Similarly, we serve most of the British national brands, and none of them said they fear end of outsourcing,” Chandrasekaran added.