TCS expects at price hike despite debt concerns

Despite global economic concerns, IT major Tata Consultancy Services (TCS) has clinched deals at a premium of 2-3 per cent in recent times.

The company said it was expecting prices to go up in the coming quarters, if demand remains constant. “In the last few months, we had been able to increase the pricing by 2-3 per cent for some clients,” said TCS CEO and MD N Chandrasekaran. However, he said the number of such deals were not significant to reflect in the balance sheets.

TCS, which posted a better than expected 26.7 per cent profit for the first quarter, said if demand continues to be where it was, the pricing should go up. “This is because the continued demand will always drive pricing high,” said Chandrasekaran. The new deals up for renewal will also see price negotiations, he added.

TCS has exuded confidence to maintain the growth momentum despite the debt crisis in Europe and unemployment in the US. The company, however, has been cautioned to remain vigilant about market conditions in the coming months.

“We think the environment is good in spite of the macroeconomic uncertainty in different parts of the world. Some of the countries are failing in Europe and there is the issue of unemployment in the US. But still I think customers are going with their plans as intended,” Chandrasekaran said.