India’s largest software services firm Tata Consultancy Services (TCS) has reported a 16 per cent surge in net profit to ₹6,084.66 crore for the quarter ended September 30. Bloomberg TV India caught up with N Chandrasekaran, MD & CEO of TCS, to get an insight into the company’s future plans.

The leading brokerages are very upbeat on your bullishness and saying that if the management is confident then things are not going to be that bad. But Q2 results are sending mixed signals. On the one hand you have got great client additions and you are looking at better expansions in terms of hiring; on the other, revenues are disappointing for the fourth quarter in a row. What’s your view?

I think, overall, it has been a good quarter. We have seen acceleration. What we looked forward to in Q2, which is the strongest quarter, has been the acceleration from Q1.

We have delivered a volume growth of 4.9 per cent. The CC (constant currency) growth has gone up from 3.5 to 3.9 per cent.

And if you look at all other operational parameters it’s an excellent quarter.

And it is also true, especially in dollar terms, there have been continuous misses for several quarters with respect to the market, especially analysts estimates. Even though the misses in any particular quarter are very small, the continuous misses all add up. And primarily, it is attributed to the weak spots.

We have been having two or three weak spots which I have calibrated and explained in the past and also on Tuesday.

Sequentially, second quarter dollar revenue has been the lowest in three years…

But that I think you need to look at it year-on-year. Also, last year we had an acquisition growth.

But realisations have also been a problem, as it is largely because of the rupee movement rather than the operations. In terms of the operations matrix where is the pressure that you are seeing? If there are client additions is it the pricing pressure which is not pushing revenues up?

I think it is playing out the way it should be playing out. You need to look at two points. When you talk about the realisation, our realisation has been flat, on a yearly basis. Last year also it was flat, year before also it was flat. So if you really look at the realisation movements in a particular quarter, it always changes based on the geographic or services mix.

But overall, on a yearly basis, realisation has been flat and we expect we will play out this year. Realisation will also be flat this time.

The second point is that we had four exits in Q4. And after that we delivered a good 3.5 per cent growth in Q1 and we are seeing acceleration from there.

So otherwise, there are no specific pressures. Specific pressures are always indicated in three or four places, which I have elaborated in detail.

The general concern is that if the first half, which is normally a good half, has shown so many pressure points, what does it mean for the second half and how are you are going to make good in the rest of the year?

No, I am not telling you any guidance. Second half is always lower than the first half. As we go into Q3, we have to take into account that there will be further loss and lesser working days and this will definitely create a pressure. All I can say is that it is nothing unusual this year compared to the earlier years based on all the data points that we have on us today.

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