Rajesh Gopinathan: Technology to boost investment globally for many years to come: TCS chief Rajesh Gopinathan

Bombay: According to Rajesh Gopinathan, chief executive officer of Tata Consultancy Services (TCS), who anticipates volatility from geopolitical conflicts and potential decoupling from the global economy, technology will be the main driver of investment globally over the next five years and more. in effect, boosting demand for specific technologies.

Cybersecurity, building resilient and adaptable supply chains, various forms of data protection and sovereignty-related issues will emerge as “big drivers for global technology spending,” the 51-year-old CEO said in an interaction with ET.

India’s largest software services company aims for “profit-driven growth” as it aims to double its revenue to $50 billion by the end of the decade. “We are closer to a bicycle than a sports car. It’s not about speed, it’s organic growth and we know that balance is more important than the sport,” said Gopinathan.

The $25.7 billion software giant expects to match double-digit growth with margins of 26-28%.

In fiscal 2022, TCS grew 15.9%, bringing in record full-year deals of $34.6 billion, nearly a third of which came in the last quarter. In comparison, rival Infosys grew 19.7% but posted a lower operating margin of 23%, compared to 25.3% reported by TCS.

“The theme that technology will be an increasing percentage of (business) spending is unlikely to be put to the test in the coming years,” said the CEO and CEO of TCS.

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Given that the Tata Group company is “pretty narrowly focused” on the Western Hemisphere and the odds there are “100-fold compared to anywhere else,” Gopinathan says it has little to fear from the ongoing geopolitical battle.

“The US is our primary market. The US, UK and Western Europe together account for 80-85% of our business,” he said. TCS is not present in Russia, Ukraine and Belarus and has minimal operations in parts of Asia. “Japan, Australia and India, US, UK, Europe, that’s about 90-95% of our sales,” he added.

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However, the ongoing conflict between Russia and Ukraine has accelerated the need for dual trading systems and dual (business) ecosystems, which must be kept independent from each other, and technology will play an increasing role in enabling such a world order, Gopinathan stressed.

From fiscal 2018 to 2022, the Mumbai-headquartered company saw its revenue grow 30% and last September crossed the $200 billion mark in market capitalization, making it second only to Accenture by this metric among global IT service companies. .

Further, as global business moves toward a “post-pandemic world,” companies are now discussing transformation agendas rather than coping mechanisms.

“This year the dialogue is much more about where the growth opportunities are, where the transformations are, that’s the big shift that has taken place,” said Gopinathan.

India, which he described as “very much a local tech story(and) not an imported technology story,” has “allowed free capital flows,” unlike China, which “enforced property localization,” he said, pointing to companies like Flipkart — acquired by Walmart – or Zomato or Swiggy, all of which are locally built.

“India’s digital transformation – both public and business – has been carried out entirely locally, which is why we are so uniquely positioned among all emerging markets,” said Gopinathan, citing the country’s digital payments infrastructure for a special mention.

“Nowadays people put wrappers on that payment infrastructure and put a brand around it. A lot of the global brands do a much better job of advertising it on TV, but the underlying rail that makes it possible is local (built),” he said. †

While the Tata Group company — founded in 1968 — will take more than 50 years to reach $25 billion, Gopinathan’s ambitious goal to double revenue this decade is built around a company-wide organizational change that kicked off earlier this month. . The strategy involves a big bet on partnering with clients on their transformation journeys as they navigate a more uncertain world and rapidly changing technology landscape.

“Today we have about 1,200 customers. When we double, we want (let’s) say, 2,000 or 2,500 customers. But we want to make sure that the level of service we can provide to all customers is equal to or better than true we are now,” he said.

This includes TCS’ ambitions to bring in more business from its parent group, such as the iconic Air India. While TCS can have a natural advantage, “as with all of our group companies, we fought hard and won, so we can’t assume we’ll have it automatically,” Gopinathan said.

“We have a trusted relationship that we can leverage, but beyond that we have to earn our dues. So Air India is still in the early stages of that dialogue,” he said.

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