Disruption is the common denominator: B V R Mohan Reddy

Interview with Chairman, Nasscom

Nasscom, apex body of the Indian information technology (IT) sector, announced on Wednesday the appointment of B V R Mohan Reddy as its chairman for 2015-16. Founder and executive chairman of Cyient (earlier Infotech Enterprises), an engineering services entity, he talks to Surabhi Agarwal on his priorities.

Your priorities for a sector staring at challenges?

Three ideas. First, there is tremendous opportunity in India now. The governments at the Centre and in the states are very progressive. Second, the sector has matured quite a bit. It has worked for the global market over 25 years — started with cost arbitrage, then capacity building and is now saying we can participate in transformative agendas. The third dimension is that disruption has become the common denominator in today’s world, be it cloud or mobile.

If you combine these three – the opportunity in India, sector maturity and disruption in the technology landscape, you get a recipe for a success story. My priority on behalf of the sector will be on how we address this opportunity.

From a policy standpoint, what are the top pain points?

Regarding policy discussion with the government, our  priority is a re-look at procurement. The current policies on this make it difficult for Indian companies to participate. They still go by the T1/L1 raj, which is that technically you should be the number one but price-wise, you should be the lowest.

Also, there are some challenges with start-up companies. When they raise money, the valuations are not very accurate. That’s the second discussion on.

On traditional IT services, how is the demand scenario?

Still very positive. We have not seen any let-up on the traction, anywhere in the world. The challenge we have is volatility in the currency. For example, the euro has depreciated 21 per cent against the dollar. Our ability to manage this cross-currency movement is going to be a challenge because if the reported revenue is in dollars, it will impact the dollar growth. It will also impact the margins. If you have your costs in one currency and your revenues in another, you will have an impact. Apart from this, the pipeline is very good.

What about the target of $300 billion in revenues for 2020 set by Nasscom? Will the industry be able to meet it?

We are not revising those. They are absolutely intact.