Latest News | Tariff Moves-induced Uncertainty Will Be Short-lived: TCS CEO
Get latest articles and stories on Latest News at LatestLY. K Krithivasan -- the chief executive and managing director of TCS -- believes that the tariff moves-induced uncertainty impacting the sector will be "short-lived" and expects it to get resolved within "months".
Mumbai, Apr 13 (PTI) K Krithivasan -- the chief executive and managing director of TCS -- believes that the tariff moves-induced uncertainty impacting the sector will be "short-lived" and expects it to get resolved within "months".
The over USD 39-billion order book of the company will ensure that TCS will continue revenue bookings, the head of the country's largest IT services company told PTI in an interview.
Stating that the deal pipeline is "strong", Krithivasan said the current situation where some clients have stopped discretionary spending is not resulting in any pricing pressures.
In fact, there has been a slight uptick in pricing both on-year and from a sequential perspective, he added.
Without disclosing the share of clients' discretionary spends in its over USD 30 billion revenue, Krithivasan said such spends are a "significant" part of the topline, but appeared unfazed by the current trend of such revenues being impacted.
"My belief is that this uncertainty will be short-lived. Within a period of months or whatever, it will be solved...," he said, adding that the strong order book will help it on the revenues front.
If there has been a decline in the conversion of the total contract value or new deals to revenue bookings, Krithivasan said there has not been any significant change, and added that it will take months of the uncertainty prolonging for it to change.
He said once the situation is resolved in the US, it will help the company resume growth in the North America business, whose share in the overall revenue pie has declined to 48 per cent now.
Progress in trade talks between India and the US will not have a direct impact on the company's business, he said, adding that prolonged lack of growth in the North American country will impact client decisions across sectors.
Given the prevailing conditions, some clients are looking at cost optimisation measures, he said, adding that compressing the pricing from IT vendors is among the levers used by clients in this regard.
There may be some situations where the company may have given some tactical discounts as well, he said, reiterating that despite the uncertainties, there is an uptick in pricing.
To a question on the impact on resource allocation amid the ongoing challenges, Krithivasan said utilisation has improved in recent times.
He said the company would like to maintain India's 8 per cent contribution to the revenues going forward, even though there may not be a BSNL-like deal that has pushed the share higher and also helped the company post revenue growth in an otherwise difficult FY25.
The company sees large deals in the country, Krithivasan said, pointing out that banks can be one among the customers.
Krithivasan, who is set to complete two years at the helm soon, said he has made some tweaks in the company's structure, majorly driven as a response to the ongoing changes in the market.
AI and cloud have been made into independent units, which can collaborate when needed, he said, adding that given the importance of data, it has been placed together with AI.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)