TCS apprehends European fiscal uncertainties will affect revenues
India’s largest IT and ITeS service vendor in terms of export revenue Tata Consultancy Services (TCS) has expressed apprehensions that the prevailing euro and pound crash coupled with a momentous appreciation of the Indian rupee was likely to have a bearing on the firm’s revenues and operating margins. At the same time, the Indian IT major emphasized that thus far the European crisis has not had any adverse affect on its business.
A website quotes TCS CEO Chandrasekaran saying that the overall weakening of the euro and pound has causes significant concern. He further stated that the effect of the euro and pound crash will, however, be less owing to the strengthening of the US dollar. Stating that the business of Indian IT major has not yet been affected by the European currency crisis, Chandrasekaran mentioned that it is essential to observe the situation cautiously and assess the consequences it may have on the Indian IT and ITeS service providers. According to him, although the crisis is unlikely to affect the firm’s business immediately, TCS has adopted a ‘wait-and-watch’ approach. In reply to a question on the changed scenario in the United Kingdom with the new coalition government is in power, the TCS CEO said that his firm has been executing projects that have been granted to it.
According to Chandrasekaran, although the weakening European market, which is the second largest market for the Indian IT sector, has been of concern, TCS, which offers services like consulting, back-office outsourcing and systems integration, has momentous prospects in the United States and the emerging markets. He said that his firm has distinguished 'Cloud Computing' as the largest opportunity for it to generate new business models. Substantiating his view, he pointed out that TCS has made three bids in the banking sector. However, in response to a question, he said since TCS was yet to locate the right asset, it has not entered into any acquisition lately.
Another news agency website reports that TCS chief was of the view that the recovery of the global economy, recent contracts combined with the steady fees has enhanced the position for the export-oriented Indian IT companies, including Tata Consultancy as well as its business rival Infosys Technologies, the second largest IT and ITeS service provider in India, following the global economic slump that affected the $15 billion outsourcing sector considerably.