The Hindu Business Line : Little sectoral impact of US slowdown: TCS

“There is no impact of slowdown in the US on the technology sector as yet and business is as usual and the momentum continues,” according to the Chief Executive Officer and Managing Director of Tata Consultancy Services, Mr S. Ramadorai.

While the technology sector is cautiously optimistic about the business prospects, there are indications that larger deals would continue to come through. However, obviously there are related reports that indicate some economic slowdown concerns, he said.

Addressing a press conference here, Mr Ramadorai, along with Mr Mahalingam, TCS CFO, said, “If someone were to ask if there is any impact due to slowdown? The answer is ‘No’. And there is no reduction in deal flow and no slowdown in decision making or in cross selling prospects.”

SYNERGY PARK

The TCS management is set to invest about Rs 750 crore in various infrastructure facilities in Hyderabad and of this about Rs 270 crore has been pumped into the first phase of Synergy Park project, inaugurated on Monday.

The General Manager of TCS, Hyderabad, Mr V. Rajanna, said TCS now employs about 6,000 people in Hyderabad and has offered 4,000 letters to campus recruits. The phase one of the project will host 2,700, phase II slated for next fiscal, 5,500 people.

CMC, which is part of the Tata group, was among the first one to establish a campus in Hyderabad, Mr Ramdorai said.

Hiring plans

Asked about TCS hiring plans, Mr Mahalingam said that the company has handed over 22,000 letters of offer for freshers for 2008-2009 and from the company perspective, the recruitment too is as usual from various parts of the country.

On the recent news about TCS handing out pink slips to about 500 people, Mr Ramadorai said for a company, which now has over 1,08,000 employees, and continues to recruit in large numbers, and with a low attrition level of about 11 per cent, this was blown out of proportion and quoted out of context.

In fact, about 45-50 people were removed each month over last 10 months and 469 is insignificant. Media bunched it up and this received adverse publicity, he said.

Tax sops

With regard to STPI and tax-related issues, Mr Ramadorai said that there is need to watch out for the direction the Union Budget provides on continuation of STPI sops and dividend tax on foreign companies.

On possible acquisitions due to weaker dollar, Mr Ramadorai said that the acquisitions from TCS’ perspective are not made based on rupee-dollar parity but what is right strategic fit and the value it creates. In fact, there is huge opportunity to grow organically.

Whether they are on target to achieve $10 billion turnover by 2010? Mr Mahalingam said the company’s performance in the third quarter of 2007-2008 of $1.7 billion is indicative of what is in store ahead.

The sector salaries have grown by about 15 per cent per annum and it is time for them to stabilise based on a variety of factors, business pipeline, capability etc, Mr Mahalingam said.

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