Tata Consultancy Services, India's biggest software services company, posted third quarter results in line with expectations with a 21.8 per cent rise in net profit. The company said it expects pricing to remain stable in the fourth quarter.

In an exclusive interview to NDTV Profit, N Chandrasekaran, CEO & MD, TCS said that discretionary projects are taking some time but that won't affect the company’s volume growth. “Our volume growth has not slowed down. Also, our deal pipeline is healthy. We are happy with client budgeting for the next fiscal,” he explained.

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Below is the complete interview. Don’t miss the accompanying video.

 Given what you have done, what does FY13 look like? What’s the picture?
 

If we look at FY12-13 from a budget perspective, I think I am quite happy of the fact that the majority of our clients have finalised their budget. Those who have finalised their budget, two thirds out of them have indicated that they are flat up, and one third said that it will be down from the current fiscal. And that is a good number because even in the most optimistic year, you are not going to have all your clients increasing their budget because budget is a phenomenon of the individual company. So that factor is not a concern.


Secondly, if you look at the kind of deal signing we have had, it has been pretty good. We have not seen any slowdown on the deal signing. The size of the deals is quite large. The pipelines look healthy. We are not experiencing any market-specifics slowdown. 


Take Europe for example, we have had a second sequential quarter, where we have done extremely well. Deal signing in the Europe in the previous and current quarters has been quite good. 


Telecom is a trouble sector for us. We are going to do better because we have done good number of deals in telecom both in the Q2 and Q3. So given all this, I feel that there are no specific things that bother me on the growth.

Will the connect between macro and business continue?
 

Macro is always there, you just need to be worried about how it will pan out. So, unless we see something on the ground, I don’t want to change my own assessment of the situation. Thus, I think that 2012-13 is going to be a good year.

You said that 50 per cent of the samples of your discretionary projects are not ramping up as expected. Do you think it is normal?
 

No. Actually in the third quarter, we have taken samples of 130 projects and on 50 per cent of those samples, we have seen delays. Either they got delayed within Q3 or some spilled over to the Q4. So, that ramp up is going to show in the lag effect of the volume. So, we need to factor in this in the fourth quarter estimates. But I don’t see this as phenomena throughout the year because of the deal signings we have seen over the year.

There are two parts to this. One is running the business, which is growing fine and the other is the discretionary side, which is not ramping up on the expected lines. So what does it mean to you in terms of the volume of work that you will do in the coming year?
 

Overall for the year, I don’t want to raise any alarms. In the third quarter, we expected to start some of these projects. Some started in Q3 but with a delayed effect. Hence, this is going to show delay in the volume of work. But otherwise, I don’t see much impact on volumes in 2012-13.

 You will exit FY12 with a 20 per cent plus kind of a growth number?
 

We don’t give guidance...

People are saying growth will moderate to about 15 - 16 percent or so in FY13 for the industry as a whole. Is that a fair number?
 

From the industry perspective, I think 15 per cent is achievable.

Is that a bare minimum that you will do or is that a number to aim for and if you achieve, you'll be happy?
 

We need to wait for the NASSCOM to make those projections. I am sure NASSCOM is talking to all the companies and we'll meet in February. We'll have all the data by then.

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