TCS expects India biz to pick up faster

Company says new govt is likely to adopt technology faster

Tata Consultancy Services, India’s largest information technology (IT) services company, said on Saturday it was expecting its local business to pick up faster on anticipation of increased spending on technology by the new government at the Centre. The company also said though the rupee was appreciating against the dollar owing to the decisive mandate in the Lok Sabha elections, only a volatile currency could be a cause of concern.

“I expect the India business to pick up with the kind of mandate the Bharatiya Janata Party got on Friday. I do expect that the new government would adopt technologies faster, while we will see a revival in corporate spending across the board,” N Chandrasekaran, chief executive and managing director of the Mumbai-headquartered company, said. Among Indian IT services companies, TCS has a fairly high degree of exposure to the local market, from where it derives around seven per cent of revenue. However, the region has been under pressure in the past couple of quarters due to the slow pace of technology spending in the country. In the quarter ended March, the company’s India business posted a growth of 0.3 per cent.

“I am extremely positive that things will pick up in India, much sooner, with the very decisive and strong mandate the people have given yesterday (Friday). I expect that the new government would adopt technology very significantly and our nation will adopt the digital technologies much more than ever before,” he said.

A large part of the business for the Indian IT sector comes from government projects even though they are also actively engaged with the private sector. However, the delay in decision making and execution by the government in large contracts has been a cause of concern in the recent past.

Chandrasekaran said the new government is expected to push forward the proposal for projects related to e-governance, including digitisation of records. “I think there will be lot of opportunities in every department. For example, there would be a lot of works in the financial sector reforms; digitisation of records, whether it is in judicial systems or in any other department.”

Besides, he said with the new government expected to focus on infrastructure building, it would make it easier for IT firms to expand into tier-II and -III cities. “Even though we are talking about expansion into many tier II and tier III cities, we are not able to set up big centres there due to lack of infrastructure such as road, power and airports. Thus, you end up in hiring talents from smaller cities, and relocating them to larger cities,” he added.

Talking about overall opportunities, Chandrasekaran said the US market continued to be attractive as clients were seen sticking to their projects and discretionary spending was opening up.