Change of guard in IT biz; TCS is new bellwether: Experts

For a long time, we have seen that Infosys walking out of the deals, however in last one or two quarters they were little flexible. However, among the lot they are still tough on the prices, but pricing pressure is very clearly visible.

Q: Based on the commentary of both Infosys and TCS management, what is your assessment of how much pain is left as far as the next few quarters are concerned and what is the sense you are now getting for the sector?

Iyengar: If we use our demand insight, which comes from talking to clients that are framing their plans for IT services, I am clearly in the TCS camp in terms of demand showing signs continuous expansion. Across verticals TCS numbers have seen healthy growth.

What provides to the context of optimism is the fact that the numbers and the growth for the Indian industry is continuing to come out of not the big ticket discretionary items, which are under pressure across the globe but companies being under pressure to cut the business element of IT, which for most enterprises on an average constitute about 70-80% of their IT spend.

In most cases, they have no option but to continue to spend to keep the lights on and that is the sweet spot for the Indian providers.

Talking about discretionary spends causing lack of visibility or a demand side weakness is entirely missing the boat. The demand side is fairly strong and we see clients continually looking to increase their offshore component.

Q: What do you expect from Wipro ? Do you expect Wipro to fall in the Infy camp or do you believe that this is perhaps going to be a different quarter for Wipro?

Iyengar: Wipro is in a state of transition from a management perspective. So, I am a little hesitant to place a strong bet on where Wipro will end up. But if I were to take a call, I would say it is likely to be closer to TCS than to Infosys.