See expansion in digital deal sizes: TCS's Vandrevala

Below is the edited transcript of the panel discussion to CNBC-TV18.

Q: Utilization peaking at 84.3 percent, do you expect with the addition of that five extra thousand people that you spoke of that utilization will be maintained at this or it might slip a bit?

Mukherjee: We have said so far it is 81 to 83 percent. It’s the utilisation that will be comfortable for us and we have been doing much better than that. That has been one of the levers that we have been utilizing for the operational efficiency. At the same time, we should also look at 84.3 as something which is an average across all the organizations. There are units which are doing higher than, there are units which are doing lower than that, for example BPO will be a unit which will be traditionally operating at a much higher utilization than 84.3. It’s the business mix, which will also determine what will be a comfort range for us.

Q: But you have an idea of what the business mix will look like at least in the short-term.

Mukherjee: Exactly.

Q: So I am saying is 84.3 the best you are likely to deliver in at least the next few quarters to come?

Mukherjee: From the next few quarters’ point of view, we would like to keep it where we have already achieved at 84.3 or improve it slightly. However, you won’t see a very significant kind of a change going forward. Looking at the demand that we have and looking at the current utilization we are looking to up the target from 50,000 to 55,000. That is the total number of addition that we will be doing.

In this year we have already done 43,000 employees, this quarter we will do about 12,000. So, this is all interlinked with the utilization and with the kind of demand that we have which we have to fulfill at this point in time.

Q: The big opportunity, Chandra quantified for us for the first time that digital could be a USD 3-4 billion opportunity for TCS in the next three years or so. I am not saying it is an immediate one, and if I look at the very short-term bit and not connected specifically to digital, you did about eight big deals this quarter. The question I am trying to get to you is what is the prospect for deals to get bigger in size if the global economy recovers and how much of this will come from this new space of digital where we have already been told that pricing could be far better?

Vandrevala: In terms of the overall deal pipeline, in terms of overall realisation in the IT market or where TCS is, where the kind of things that we can do, the overall deal size will continue to expand.

If we look at all our proposals in the pipeline, every quarter one will see we are doing something bigger, something bigger and something bigger.

As far as big deal in the digitization space is concerned, from deals being sub-million, we are now seeing deals in the millions; in the two-three-five million range.

I am not in a position to take a call when we will see the first more than 50 million digital deal, but looking at our client’s budget and their focus on digitization, a huge amount of money is going in.

The nature of this business tends to be short, simple projects that you keep building on. If clients take a view that they want to do some big bang digitization spend then we are very well positioned to play in that space and some of our deals will unravel in that manner.