TCS expects better growth in Q4; pricing to remain stable

Q: Do you see discretionary spend being a problem going into the next fiscal year as well?

Chandrasekaran: Not really. Some of the clients that we have seen are going to spend a lot of money on discretionary spend.  We are surprised to see that. There have been situations where some clients have been very cautious. So, it has been a mixed bag.

We are not able to say this sector or this country is spending and this sector and this country is not spending. That is not a pattern that we are seeing. A lot of retail clients, equity clients and lifesciences clients are investing. We have not heard from many of them that they are looking at it differently in the current context.

Q: What’s happening with budget? In the next few weeks do you expect most budgets to close or are you sensing from your clients there might be any delays?

Chandrasekaran: As I said, out of the 120 clients we took, 96 have closed budgets already. Out of that, 2/3rd have indicated that it will be up or flat, which is pretty good actually speaking because in any year, even a very good year, you can’t expect 100 out of 100 clients increasing their budgets. In any year, there will be a set of clients who will decrease their budget because of their own situations. So I have been positive from the data points I have heard on the budgets.

Q: So you are saying it could be marginally positive as well next year?

Chandrasekaran: There are clients where it is positive. 

Q: What could the blend be like?

Chandrasekaran: We should be careful in taking an industry view because all I have done is to study our client base.

Q: I am asking purely for you, your budgets, for your clients. Not for the industry.

Chandrasekaran: It is healthy, in a way it may even be better than last year.

Q: Any improvements in pricing because you did get an uptick in the current quarter? Should one extrapolate it?

Chandrasekaran: No, as far as pricing is concerned, we will be very careful. The environment is tough, so in this environment it is going to be difficult to get a pricing uptick, but we can definitely say that we will be flattish.

Q: You are just managing expectation or you really believe there is no room for upside next year on prices?

Chandrasekaran: As we stand today, I would not like to say that there will be uptick, but who knows from now, six months from now, we will have opportunity to talk again.