Mumbai: Tata Sons Chairman Designate Natarajan Chandrasekaran met with Shereen Bhan, Managing Editor CNBC-TV18 for an exclusive interview that was aired on CBNC-TV18 on Thursday at 8:30pm, followed by a re-run at 10:30 pm, wherein the former shared his views on the bright future of Tata Consultancy Services (TCS) under Rajesh Gopinathan who succeeds him as TCS’ Chief Executive Officer.
N Chandrasekaran is poised to take the helm at Tata Sons, and while he largely remained tight lipped about his new role, he said, “Well frankly I think it’s a very big job but the canvas is large. And a lot of exciting things to do and there are challenges and opportunities. I’m looking forward to it and I hope I can make an impact, make a difference.” Over the course of the interview, Chandrasekaran also threw light on the shifting focus of the multinational IT giant going forward, the prospects of strategic M&A’s in the future, and negating the issues that are predicted to crop up because of the H1B1 US visa regulation.
A rather bullish Chandrasekaran suggested a smooth transition for Rajesh Gopinathan to his new CEO role at TCS, while also suggesting that he will continue to be a part of strategic conversations with Rajesh and the team going forward. “Rajesh commands respect, and he understands the strategic nature of the business,” Chandrasekaran said. “If you look from the company’s bench perspective, this is one of the strongest teams, and we have people below Rajesh managing anywhere from USD 1 billion to USD 5 billion end to end. So, the strength of the company is very solid, but for myself, yes, I am going to be around. I am going to be associated with TCS,” he asserted while setting the record straight with regards to his future involvement at TCS.
Articulating certain specific areas which Chandrasekaran wanted to beef up even before the change of guard at TCS, he said, “There will be a tremendous focus brought in, in cloud. We have thought about it, we have discussed and debated our business model around cloud and we have some ideas on how we want to go about cloud, so we will put enormous emphasis on cloud.” On the prospects for TCS in the current calendar year, Chandrasekaran said that he feels “extremely positive.” Speaking about Rajesh and himself traveling together to meet with a lot of customers, he reinforced that there is a “lot of demand” and that the IT major needs to have the “the right solutions for the customers”, so that they are able to capture that demand effectively.
Speaking about TCS’ dividend and share buyback policy by putting it in perspective with regards to the company sitting on huge cash reserves, Chandrasekaran said that the company is looking for the right opportunity to come along. “Every tech company has a large cash balance, not only Indian companies, but every tech company internationally has got large piles of cash because we don’t know in this market, suddenly something shows up and we want to invest in the business. However I would agree with those who say that we have to return back lot of cash to the shareholders. I would agree with the view to the extent that we need to decide what is the safe number we should retain and we can’t be infinitely saying I want to keep growing this. So, we need to have comfort.”
Chandrasekaran quashed any serious concerns for the company and the industry on the much talked about H1B1 US visa regulation issue by saying, “The solution lies in what is the business model — so it will not be a simple change, the availability of visas on one hand, there may be minimum wage on the other one – so that will be a combination of changes that can come,” he asserted. Chandrasekaran also said that the company has already had the experience of working in environments where visas have been difficult to get. TCS has learnt a lot from those experiences and having successfully handled similar situations in the past, he said that it is “very hypothetical to start saying that there will be a problem.”
Lastly, speaking about company growth or the lack of it going forward, Chandrasekaran said that he does not foresee any “de-growth” happening in any of TCS’ core units. On being asked by Shereen Bhan about TCS catapulting itself in automation or cloud, and if that would effectively open the IT major up for M&A opportunities, Chandrasekaran was quick to respond, “If there is an opportunity, we will take it. But that is only because strategically it will create long-term value accretion for the company, long-term growth for the company, not because the target for us in a particular year. It has come to come from our revenue growth.”
