Funding environment for digital push remains strong

By Sethuraman N R and Munsif Vengattil

BENGALURU (Reuters) – Funding commitments for digital push remain intact despite a challenging macro-economic environment, the chief executive of India’s No. 1 information technology service provider Tata Consultancy Services Ltd said on Monday.

After reporting quarterly results last week, India’s IT service providers indicated that companies that were splurging top dollar during the pandemic have turned cautious in regions such as Europe and the United States.

The pandemic unlocked a lot of funding commitments in terms of digital transformation, TCS Chief Executive Rajesh Gopinathan told Reuters.

“When you look forward, for the next 12 to 18 months, that excitement level (towards digital transformation) has died down, but the funding commitments have not gone away. What we are getting into is the second leg of these transformation journeys, which is very critical.”

Gopinathan earlier this year completed five years as the CEO of the IT behemoth and was reappointed for another five years till 2027.

Mumbai-based TCS reported better-than-expected quarterly results last week, but flagged that long-term deal decision making remained soft due to macro-economic challenges.

However, the company added that it expects demand momentum to continue across all markets.

July-September order book was steady and stood at $8.1 billion, consisting of several small- and medium-sized deals rather than large ones, according to TCS.

“We are equally interested in large and small deals. But as the environment turns more uncertain, deal sizes typically become smaller,” Gopinathan said.