TCS to keep watch on US immigration bill: CEO

 Tata Consultancy Services expects the next financial year to be better than the one that ends in March 2014, even as it remains cautious about immigration reforms being legislated in United States, its largest market, and a volatile rupee.​ 

"FY14 has been a good year for us and initial indications are that the coming fiscal will be better," said N Chandrasekaran, chief executive officer at India's largest software services exporter. "As for the challenges in the coming year, we will be keeping a close eye on the US Immigration bill and the currency fluctuation." 

The US immigration bill which is expected to come up in US Congress, if passed in its current form, will hurt the $76-billion Indian IT export sector. The proposed legislation, which the industry considers discriminatory and a trade barrier, requires companies to bring down their visa-dependent workforce significantly over the next three-four years. This could force Indian companies to hire more people locally, disrupting their current India-centric model. 

Chandrasekaran said he sees huge demand in digital services such as mobility, cloud, social media, and data analytics, which he described as 'digital five forces'. Market research firm IDC sees these newer technology areas pushing global technology spending in 2014 up 5% to $2.1 trillion. When asked whether these new technologies will help TCS delink revenue growth from headcount growth, Chandrasekaran said "business will never be completely non-linear". 

"This is a very successful business model. We are still 1.5% of the global market. There are lots of opportunities and this model will continue," he said while adding that there will be a parallel model that will bring in non-linear revenues, which is small now. "Going forward, non-linear revenue growth from a very small scale will grow much faster than the linear model. But both will grow and there's no effort on our side to restrict the growth of current business model — it's successful, it's scalable." 

Chandrasekaran said TCS expects to maintain the margins at around 27% going forward. The company however, expects its India business to go a bit slow because of the upcoming election in 2014. TCS has hired nearly 50,000 people this year and said that they will keep up with the hiring as planned. TCS, with about 2.8 lakh staff, is India largest private-sector employer and second-biggest technology company by employee strength globally, after IBM. 

"We expect the demand to go up in all geographies and verticals," Chandrasekaran said about the year ahead.