This year, TCS should see a very broad-based growth: Rajesh Gopinathan

TCS’ CEO & MD Rajesh Gopinathan and COO & ED N Ganapathy Subramaniam explain the key growth drivers for the company in last financial year and in June quarter. Excerpts from an interaction with ETNOW.

Edited excerpts:

It has been a good all-round performance. TCS is a $100 billion company. It happened after your last quarterly numbers. What was your first reaction?

Rajesh Gopinathan: Quite frankly the reaction was oh wow. But yes, it is in many ways a huge milestone for us. I do not think we planned for it or even anticipated it, but we are quite happy with the trajectory that we see.


The growth that TCS has reported in the last two quarters has silenced a lot of naysayers, people who were doubtful about the change of guard. So for you personally, it has been great. Where have all the doubters gone?

Rajesh Gopinathan: Most of the doubt was actually about the strategy and about the comapany’s choices. The leadership change happened quite smoothly and as we had said, Chandra has become the chairman. It is not that he has disassociated from TCS. It has been a fairly seamless experience.

The bigger question was whether our strategy for organic talent development is right and whether we were risk averse. We have shown that our strategy is right and a big validation has come for our growth and transformation agenda. Personally, that gives me a lot of satisfaction.

The quarterly growth in your eight verticals has been between 3% and 5.9%. This reminds me of the purple patch TCS had in FY15 when there was all- round growth between 3% and 6-7%. Am I right in assessing that?

Rajesh Gopinathan: Purple patches are not really for a couple of quarters. Yes, we are now in a good position. There are always a few areas of weakness. But this year, definitely we should see a very broad-based growth.

In terms of communication based on what you have done for the last and this quarters, is double digit growth the new normal for TCS now?

N Ganapathy Subramaniam: We always said that as a management team, we are extremely focussed on getting back to double digit growth. What has changed in the last three-four quarters is really about our top leadership framework on business which drives growth and transformation.

Second, we are so fixated about driving business outcomes because of end to end capabilities, that we have built and leveraged a suite of digital technologies and offerings. That positions us well and the results of Q1 has set us very nicely on path of double digit growth.

Is this momentum here to stay for FY19 because Q1 is a good quarter but will this translate into a good second half also?

N Ganapathy Subramaniam: I think so. The deal booking is very strong. We have announced $4.9 billion of order bookings in Q1 and the deal pipeline looks good and it is very broad-based. America is growing. It has grown by 3 odd percent, UK is firing on all cylinders, continental Europe is growing, Asia Pacific is growing and across verticals we see opportunities across both traditional as well as digital services. We are actively participating in the growth and transformation programmes. All this gives us the belief and confidence that it is sustainable and as Rajesh said, we have to give it another one or two quarters to actually conclude that is we are in a purple patch.

The sense which I got from the management a year ago was that this kind of growth that TCS was targeting was ambitious. Now, it is real. Are you surprised with the market turnaround? Is the market size growing or is it TCS gaining market share?

Rajesh Gopinathan: I would not say we are surprised by it because last time we said our target was to get to double digit growth. Inherently, we had very strong confidence that this is doable but, of course, the proof of a pudding is in the actual execution and the delivery which is why we have been saying that we are seeing growth tick up and we are quite confident about getting back there.

So, we are not technically surprised and we are very pleased with where we see ourselves. It has been something that we have been working towards diligently over the last couple of years. The other element is where is this coming from? It is a much more heterogeneous market now. But it is not a very straightforward one.

We have a diverse set of competitors across various theatres both from industry perspective, geography perspective or service lines that we have been consistently winning across. But the most important aspect of it is something we have discussed in the past with you also. It is the ability to stitch together composite deals all the way from core engineering to front end interactive work. We are uniquely positioned and probably have the best portfolio of end to end services and our clients are seeing a lot of value in having single person be able to deal with the full portfolio.