A potential recession in the US and Europe has been priced into the stock markets, and now even commodities are responding to it. However, the biggest tech business in India, which stands to be the most impacted, claims to see no impact, at least not in the immediate future. TCS CEO Rajesh Gopinathan stated that the company is actively following the “R” talk and that the majority of its knowledge comes from publications.
“We are having serious discussions around it (recession). But we do not see an immediate footprint of it in the near term,” he told reporters at the company’s earnings press conference.
The dread of the recession, however, as well as that of various macroeconomic models like stagflation, slowflation, the traditional slowdown, and more, had already taken hold before the recession even began.
It appears that at least some of these worries are having an impact on the magnitude, if not the quantity, of agreements that TCS has closed.
One is that it did not secure any $1 billion deals during the June quarter. The two $400 million deals it closed are the largest wins. To be fair, it did close acquisitions worth up to $8.2 billion during the quarter. However, even this is far less than the $11.3 billion order book it received in the previous quarter. Perhaps the large corporations are closing their fists or spending less on IT.
The $11 billion figure from the previous quarter was attributed to two significant business wins, the company explained in the press conference. It is “tough” to expect that to continue; it is unclear if this is because such bargains are getting harder to find or because they are becoming less common.
“I think it is safe to assume that we will be in the $7-9 billion range. This quarter, two $400 million deals were the largest we had. Otherwise, it is a combination of small and medium-sized deals. That trend is likely to continue,” said NG Subramaniam, chief operating officer, and executive director, TCS.
Healthcare is once again being put on the back burner, according to TCS, and its retail division increased at the quickest rate. As usual, BFSI segmented the top position.
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