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Retail biz should fare well in Q4; eye strong FY16: TCS

While Q3 is seasonally a weak quarter, Tata Consultancy Services  has delivered good set of numbers, believes N Chandrasekaran, managing director and chief executive officer.

Speaking exclusively to CNBC-TV18’s Menaka Doshi, Chandrasekaran says the company faced a number of headwinds in the form of working days and furloughs in Q3.

The road ahead, however, Chandrasekaran says is smooth sailing as he expects FY16 to be a spectacular year.

“The growth momentum is positive. We expect retail business to pick up in Q4. We are working on Diligenta business, which was one of our major revenue headwind. The business is such that has one very large deal for a long time and doesn’t have much in terms of incremental news,” explains Chandrasekaran.

Reiterating the rosy picture, Chandrasekaran says the company’s discussions with clients suggests a good momentum and adds that its business in N America, Europe, India, Latin America & UK (Ex-Diligenta) looks good.

The IT behemoth’s third quarter (October-December) net profit grew 2.94 percent sequentially to Rs 5,444 crore, aided by other income . Quarterly revenue rose 2.87 percent quarter-on-quarter to Rs 24,501 crore and dollar revenue increased half a percent to USD 3.9 billion in the quarter ended December 2014, impacted by seasonal weakness.

Below is the verbatim transcript of N Chandrasekaran’s interview with Menaka Doshi on CNBC-TV18.

Q: You have had an interesting quarter and I say interesting because some part of it was predictable, you always call it a seasonally slow quarter but it has come on the back of a disappointing Q2 and therefore it has left me a little bit confused about what FY15 is going to pan out like. So, I am going to leave it up to you to characterise how this year is going to sort of evolve given this last quarter that we are in right now, what are we going to end FY15 with, definitely not growth that will beat FY14 that I know is clear at this point in time?

A: From Q3 perspective, it is a seasonally weak quarter as you said. I think we have delivered good set of numbers given that we face the headwinds in terms of the working days as well as in terms of furloughs. However, the biggest takeaway for me is that as we exit this quarter we will see in a good momentum. I think the retail, financial services industry, life sciences, manufacturing, hiTech as I highlighted in the call last night all of these things are showing very good momentum.

We at this point in time see couple of headwinds, one, is the diligent of business because the books are running off so we will have a revenue headwind in that business. The second one is the energy business because of the oil where it is today, it has actually gotten worse than when we started this quarter in Q3. So, I think these are the two headwinds but apart from we are pretty positive. I can’t give you a definitive number for FY15.

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