Rajesh Gopinathan, chief executive officer (CEO) of TCS, said on Monday that funding commitments for digital push remain intact despite a challenging macro-economic environment, news agency Reuters reported.
According to the report, after reporting quarterly results last week, India’s IT service providers indicated that companies that were splurging top dollar during the pandemic have turned cautious in regions such as Europe and the United States.
Gopinathan told Reuters that the pandemic unlocked a lot of funding commitments in terms of digital transformation. “When you look forward, for the next 12 to 18 months, that excitement level (towards digital transformation) has died down, but the funding commitments have not gone away. What we are getting into is the second leg of these transformation journeys, which is very critical,” he said.
TCS, India’s largest IT services firm, clocked better-than-expected quarterly results last week, but flagged that long-term deal decision making remained soft due to macro-economic challenges. However, the company added that it expects demand momentum to continue across all markets.
TCS logged a consolidated net profit of Rs 10,465 crore for the quarter ended September 2022, registering an 8.41 per cent year-on-year (YoY) growth from Rs 9,653 crore logged in the corresponding quarter of the previous year. The firm said sequentially, the profit rose 9.93 per cent.
The revenue from operations grew by 18.01 per cent YoY to Rs 55,309 crore compared to Rs 46,867 crore in the same quarter last year. Sequentially, revenue grew 4.83 per cent. In constant currency terms, revenue growth was 15.4 per cent YoY. The company said its operating margin came in at 24 percent, contracting 1.6 per cent YoY.
July-September order book was steady and stood at $8.1 billion, consisting of several small- and medium-sized deals rather than large ones, according to TCS.
“We are equally interested in large and small deals. But as the environment turns more uncertain, deal sizes typically become smaller,” he added.
Gopinathan earlier this year completed five years as the CEO of the IT behemoth and was reappointed for another five years till 2027.
Shares of TCS were trading at Rs 3,101.35, up 0.12 per cent on the BSE on Monday.