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After $32 billion rally, TCS CEO wants to get back to double digit growth

Mumbai :These are challenging times for India’s technology-services industry. Growth has slowed. Profits are pinched. Layoffs, once unheard of, are commonplace. Many of the businesses’s own leaders think its best days are in the past.

Rajesh Gopinathan is not one of them. The chief executive officer of Tata Consultancy Services Ltd. argues the industry’s opportunities today are bigger than they’ve ever been. The problem he contends is that his peers aren’t thinking creatively enough about how to evolve from the services of the past.

India’s tech industry was built by using the country’s low-cost labour to handle basic tasks like technology support and infrastructure maintenance. Now corporate clients need help with ever more challenging questions of technology and strategy — and companies can thrive if they divine the answers.

“The industry has been overdoing the negativity,” says Gopinathan, 46, during an interview in his wood-panelled office in Mumbai. “We have the largest technology talent pool in the world – 400,000 people – and if we can’t figure out how to grow from here, then there’s something wrong.”

He’s done okay so far. Since Gopinathan was named CEO last January, his stock is up 50%, adding about $32 billion to its market value. TCS is now worth about $100 billion, more than that of the next four rivals combined.

“Their strategy is working,” says Deven Choksey, managing director of the Mumbai-based KR Choksey Investment Managers. “Investors are more confident about TCS than its peers.”

Gopinathan vows to get revenue growing even faster, despite warnings from rivals like Infosys Ltd. about tough times. “Our target is to get back to double-digit growth,” he says, which would be up from 8.6% in the last fiscal year.

He may negotiate more acquisitions to get there. Critics point out that rivals like Dublin-based Accenture Plc have spent billions of dollars on deals to boost growth. He cautions TCS will be selective about finding “the right asset at the right price point.”

He also has to contend with President Donald Trump, who has been tightening the rules for foreign workers, like those from TCS, who take high-skill roles in the US. Gopinathan says new technologies will let his company handle client needs wherever its employees are. “Work will go where the talent is, rather than talent moving to where the work is,” he says.