What are your expectations from TCS in Q2?
This quarter, we expect the entire IT universe to post exceptionally strong revenue growth so when it comes to TCS also we are expecting a strong CC revenue growth of 5%. This time, the revenue growth would be powered by a couple of things like the conversion of the strong bookings that TCS had in earlier quarters. So, basically there is a ramp up of those deals which will happen in this quarter.
Second, the recovery of India business saw a contraction of around 14% in the last quarter. So there was a contraction of around Rs 3.1 billion revenues in the last quarter due to drag in the India business. We are expecting a strong recovery from that business also. So overall, we are expecting a growth of around 4.8% in international market and around 16% growth in its India business.
Do you think the scope of disappointment also gets larger purely because of the one way up move in IT stocks?
We believe that right now, the shift to Cloud and all other things is quite architectural in nature and we are still in the early stages of shift of workloads to cloud which might happen in coming years.
I believe that the rate cycle is going to continue very aggressively and even in this quarter, we will see strong performances across all the IT companies and it is quite possible to beat the estimates on the terms of revenue growth and margins because everyone is quite cautious and pessimistic about margin performance.
We are not worried that much about margin pressures because whenever there is a strong revenue growth tailwind, It companies are able to manage margins really well. Apart from that, there are many margin tailwinds also at play. IT companies are hiring aggressively. Basically going forward, in FY23, a lot of margin tailwinds would be visible from pyramid optimisation in these companies.
