How Capgemini plans to grow in India

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Q: Moving out of India and talking about the world at this point in time seems to be tentatively recovering from the West recession in last 75 years. We have had a good quarter for Indian IT companies the last quarter. What is the sense that you are getting in terms of IT spending sectors like automobiles for instance which is a large contributor for Capgemini, where do you seeing the recovery?

A: I am not that optimistic. Overall, I would say that the global recovery was in big danger. We avoid a collapse but I don't see the hedge for growth at this stage. So, as there was extreme caution, people cut their inventories. We now recovered to a minimum level of activity.

Where will the hedging come from? First sector that has resumed investing are banks. It is very important for the Indian IT because bank and finance are the first concerns. The first thing is we all know that the finance industry has started to recover but still acts a little bit as they used to act before the crisis then we have some wild reactions, the Obama plan, things are not totally stabilized there.

Q: Are you worried about the uncertainty?

A: The banks went through several stages. The first was the shock, then they kept everything that was not vital and they were backing to looking for economies savings. Now they invest again which is far better. We all take advantage of that.

As they stalled for two and a half years, they are a nice flow of project and investment and that fuels some recovered optimism. I still do not believe that the financing industry has found its new balance and there would be legislation, G-20 so it should be in most stable world, some project might be not fully recovered.

Q: Are you seeing a full recovery by the end of 2010?

A: Absolutely. It still needs a year to better understand what are the constraints, challenges and priorities. Automotive is getting better. It has drastically cut all expenditure. They need to reinvest. The good saying about this moment is contrary to the big recession in 2002 and 2003. That recession occurred after a new digestion of IT investment.

If you remember, the year 2000 was accompanied with probably overinvestment. Can I say that a lot of non-IT literate CEOs were somewhat resentful against us? They thought we have blackmailed them with the year 2000 danger. So when they could, they stopped paying investments. It is no longer the case. When I meet these CEOs, they know that there are a lot of promises from technology.