TCS: We are watching developments very carefully; as of now, thereis no impact on us

An interview with S. Ramadorai, CEO and Managing Director of TCS

 

"I will definitely continue to support the institution that I have been a part of for so many years." This is what S. Ramadorai, CEO and Managing Director of the country's largest software exporter says on being asked about his post-retirement plans. In the concluding part of his interview, the IT industry veteran throws some light on the years gone by at TCS. He also talks about what the future could hold for companies such as TCS.  Excerpts:

 

Do you think that the new dispensation in the US under Barack Obama will fetch fewer outsourcing contracts for Indian companies?

 

When it comes to the new administration in the US, the so-called protectionism and restrictions with regard to mobility of people, which is triggered by a number of congressmen wanting to table policy, is a worry. The other thing is the Troubled Assets Relief Programme, which may put some restrictions on IT companies. Hence, we are watching the developments very carefully; as of now, there is no impact on us.

 

In the last two quarters, the company has incurred forex losses of around Rs 440 crore largely because of your policy of insuring receivables for several quarters. Would there be a conscious shift in strategy given the rupee depreciation?

 

There is no shift in hedging strategy; as of now as we are not taking any new hedges. When we take new hedges, we will look at our hedging strategy in totality. We had taken hedges when the rupee was at 41-42 to the dollar; the general consensus at that point was that the rupee would come to 38-39 levels.

 

Would you continue to look at acquisitions this year as well? If yes, which are the areas that you would look at?

 

Evaluating acquisition opportunities is a constant process. As an M&A group in the company, their job is to look at inorganic opportunities. We keep telling the M&A guys not to bring a deal just because assets are very cheap. You can buy thinking it is the right time but if you do not know what to do with it, then it does not matter whether you bought it at Re 1 or a million dollars. It will sit on the shelf and there ends the asset. So we have to be very choosy, picky and careful with regard to creating those synergy effects. However, I would be hesitant to say which are the areas that we are looking at in terms of acquisitions.

 

If you were to take a step back and look at the acquisitions done by the company in the last three to four years (including the Citi deal), would you say that they have paid off well?

 

From the synergy point of view…Yes. From a business case point of view…yes. Could it have done better? Again the answer is yes. Did we miss out on some good acquisition? Yes, we did in some cases.

 

Source: The Hindu Business Line