BENGALURU: TCS’ stellar performance in the quarter ended June sent the company’s share price soaring by 5.5% on the BSE on Wednesday. In an exclusive interaction with
TOI,
COO N G Subramaniam talks about getting back to double-digit growth rates after two years of mid single-digits, the pursuit of large deals, and the approach to the new digital world. Excerpts:
You will cross the $20-billion revenue milestone this year. In Indian IT, that puts you in a league of your own. The gap between you and your nearest Indian competitor will be over $10 billion...
In the last few quarters, the management team has been extremely focused on working hard to get back to a double-digit growth trajectory and I’m glad that we believe we will get there. It’s also a vindication of how our strategy is coming around. Three quarters ago, there was a lot of scepticism about our effort to drive internal competencies versus growing through mergers and acquisitions.
Over the past few months, you have signed several large deals, and in the last quarter the total contract value signed was $4.9 billion. For revenue momentum, that’s great. But don’t these large deals come with lower margins? Do you have productivity levers to improve margins?
We decided to give order bookings starting with the last quarter. The intent is to give a perspective as to how the business is shaping up — out of the $4.9 billion, $1.6 billion is coming from banking, financial services & insurance (BFSI), which should give you a perspective on the health of the segment. The demand environment has picked up in North America in BFSI. Large deals come with lower margins. But I can say that over the life of the deal, margins will be comparable to the company average. I’m confident that we will be well above company average.
The management commentary on the BFSI space changed from “greenshoots” in the last quarter to now a visible turnaround of sorts. What has led to this sharp recovery?
Capital markets and insurance are the indicators of growth. A key opportunity is coming from wealth management as a line of business — people are adopting many digital solutions. Conversational AI (artificial intelligence) or new ways of bringing analytics into it. Payments is a significant area of importance — standards and regulations, instant and peer-to-peer payment, and reimagining the on-demand payments platforms continues. There is a shift from compliance-related spends to growth and investments.
