India's largest software exporter TCS said that global macroeconomic factors will not impact the tech sector at a time when the world economy is in turmoil, which has played havoc with the stock markets.
Addressing the media at Nasscom India Leadership Forum, Chandrasekaran, CEO and Managing Director of TCS, said that despite crashing oil and commodity prices coupled with slowdown in China, the opportunity in outsourcing is still strong. “The tech sector will do well as two strong themes which include business efficiency and increased penetration of digital in all walks of life are a reality,” he said. This development comes on the backdrop of Nasscom predicting that the industry will grow in the range of 10-12 per cent for the 2017 fiscal, which is slower than the 12.3 per cent growth (constant currency) in 2016 financial year.
This, coupled with Cognizant's lower earnings guidance for the current quarter revenues, which it estimates to grow in the 9.9–14.3 per cent range, is one of its lowest ever and cautioned about spending cuts by the clients in financial services and healthcare sectors.
Bullish on BFSI segment Unlike competition, TCS is bullish about its insurance and some parts of its banking business gaining traction this year. The company is also upbeat about its opportunities in the government sector, an area which is seeing increasing interest with the Prime Minister’s ‘Digital India’ and ‘Make in India’ initiatives. “We will be bidding for government projects and it is in line with our philosophy of investing in India,” said Chandrasekaran. In the recent quarter, TCS saw its India and Asia Pacific posting a 6.7 per cent q-o-q de-growth in revenues (on constant currency basis). India contributed 6 per cent of its overall revenues at the end of the December-ended quarter, a far cry from about a decade back when the company used to get 10 per cent of its revenues from India.
Chandrasekaran, however, believes that some of the projects such as passport digitisation, Railways, BSE which it did in the past, is positive for the company going forward.