V Ramakrishnan: ‘Growth momentum will sustain as deal pipeline is healthy’

Tata Consultancy Services (TCS) has reported a stellar set of numbers for the December quarter, the strongest progress in final 9 years. V Ramakrishnan, CFO, TCS, tells Shubhra Tandon in an interview that there are indicators to recommend the expansion is sustainable. Edited excerpts:
Despite wage hikes being rolled out, margins have been robust…
The largest issue driving margins is progress which was seen throughout verticals. But extra importantly, the flexibility of individuals to work from anyplace additionally elevated the fungibility. So, if you’re driving efficiencies, they translate into positive aspects. Also, we continued to be disciplined in different areas of discretionary spending. Currency additionally was benign within the quarter, which is necessary.
Will this margin progress maintain within the coming quarters as properly?
We are seeing the expansion momentum and imagine this may maintain for the reason that deal pipeline is wholesome. The potential is seen as a number of industries are fortifying and reiterating the advantages of expertise adoption. Adoption of cloud to reimagine processes throughout the firm and drive efficiencies can be on the rise, so the margins ought to stay resilient.
Has the pandemic had an influence on the IT budgets of shoppers? Are there any cutbacks?
Technology is in such a spot that it’s not simply an IT resolution however about serving to firms discover makes use of. Firms like us present these technology-led options for enterprise issues, reimagining enterprise fashions, the best way they design their merchandise, companies and provide chain and so on. So, it’s ongoing and as necessary as areas of price optimisation and driving efficiencies. Also, selections on budgets are made by means of the 12 months. However, wherever they comply with the calendar 12 months because the monetary 12 months, it is just within the subsequent few months that budgets might be finalised and mentioned, so it’s a early to remark.

The Indian market grew sharply through the quarter at about 18 per cent. What have been the levers for this progress and is it sustainable?
One has to have a look at the expansion quantity on the again of a close to 25 per cent decline in Q1 and 5 per cent or so in Q2. So, when you have got had such a trough, the rebound is anticipated to be sharp. Also, companies in India are extra project-driven and are at all times lumpy. More importantly, among the transactional-based companies like technology-based assessments for a number of aggressive examinations weren’t taking place in the previous couple of quarters as exams have been held again because of the lockdown. That has come again. Other tasks like processing of passports and so on, which is linked to transactions, the exercise has come again. The alternatives are actually good and seeing the uptick within the enterprise exercise, we’re fairly optimistic on progress. —FE