Don't see tight budget for IT sector in CY13: TCS

This is the first indication of a budget uptick for IT companies. India's largest IT company, TCS has said that CY13 will see a budget uptick of 2-4% or more. S Mahalingam the outgoing chief financial officer of TCS spoke to CNBC-TV18 on passing the reins to Rajesh Gopinathan, acquisition and more in his last interview as TCS' CFO. Kritika Saxena reports on whether TCS is confident of beating NASSCOM's growth forecast of 11%.

Below is the edited transcript of Mahalingam's interview to CNBC-TV18.

Q: What are your views on TCS' performance vis a vis NASSCOM's ?
A: If one just takes the first nine months and does the arithmetic, then one would find that we have done better than that. There is no question that as far as FY13 is concerned and  FY14 as well, TCS needs to do better than the NASSCOM estimates. Q: Last two years, the commentary on deal pipeline has been cautious. However, in the last one month we have seen research firms, analysts and a couple of companies indicate that 2013 will see a uptick if not a significant uptick, then atleast something between 2-5 percent or 2-4 percent. What is your sense from the talks you have had with clients?
A: We are interested in the extent of budget that the customer is allocating for outsourcing. We have found out that customers are thinking of increasing it. It is very difficult. It is very difficult to answer the percentage guess because it depends on the stage of the organisation. What is evident now, is that people have spent very little on newer technology introduction post 2008. They were in a cost containment mode, budget containment mode. It could be figure of 2-4 percent. It will probably be that or more, but it is not going to be a tight budget environment as far as calendar year 2013 is concerned. Q: Do you see any acquisition happening in 2013?
A: I can’t answer the question on 2013 or anything. We need to accelerate it, we would like to see even accelerated growth and that will come through two things. Firtsly, there are certain regions where we are not a significant player and secondly, intellectual property places us on a different footing. Q: There has been a relative amount of positive commentary after the new government came into place in US. There news regarding the immigration reforms. In your sense how are these immigration reforms placed?
A:  For movement of people which is very critical for companies to get the benefit, these are extremely good steps. What will happen as we go along, is that we will establish even larger facilities in the United States and other countries and so on. That will be locally and at the same time there will be the H1B visa relaxation. This gives us the capability to address the immediate needs. Q: Was Rajesh your first choice when choosing your successor?
A: We went through a very detailed process. Obviously you look at candidates and so on and it is a very good. He is an extraordinarily capable person.