Cognizant poor forecast clouds over Nasscom meet
Nasscom’s annual event in Mumbai is typically a cheery place. But the weak guidance and Cognizant’s catastrophic commentary on expected growth in its banking and financial services business cast a pall over the event that could not be denied.
Indian IT CEOs, who typically spend their time stating their intention to beat Nasscom’s annual growth target, found themselves defending their own BFSI business and batting away questions related to Cognizant.
“We are not seeing a slowdown in our banking and financial services business. Even our insurance business has had a good start to the year. We expect our BFSI business to do well,” N Chandrasekaran, CEO of Tata Consultancy Services, said at a media roundtable.
“Ask me questions about TCS,” he added when asked for the reason for divergent commentary between TCS and Cognizant. Indian IT shares have been pummelled in the two days since Cognizant said it was seeing a ‘slow start’ to the year because some banking and financial services customers had put projects ‘on hold.’
Nasscom has said the Indian IT industry will grow 10-12% in constant currency. This makes it the second year that the industry body has lowered its growth target. Long-time industry leaders say the slower growth is just a factor of the transformation the industry is undergoing. “Yes, there is a change. There is a transformation and yes, there are clouds, but that is no reason for doom-and-gloom. This is an opportunity,” Sushma Rajagopalan, CEO of ITC Infotech, told ET. And a few contested that the growth rate was bad to begin with.
“The industry is maturing, so the projected growth rates are not bad at all,” Arvind Thakur, CEO of NIIT Technologies, told ET. The gloom was contested even by some of the industry’s large banking and financial services clients. Oliver Bussmann, global chief information officer for Swiss banking behemoth UBS, said the Indian IT industry was beginning to innovate in areas like blockchain and in identifying mega-trends faster.
Bussmann, who gave a session on ‘Disruptive Technologies for the Financial Services, said it was an honour to be at NILF. “It was on my bucket list to be a speaker at Nasscom. Now I can cross that off,” Bussmann told ET.
The annual jamboree is also taking a serious look at the impact automation and artificial intelligence could have on the Indian IT sector. There are two sessions on the impact of automation “Will automation destroy jobs” and “Artificial Intelligence: will it destroy or reimagine the service industry.”
“They say we are moving towards a fourth industrial revolution where machines will join the work force and algorithms will have a board seat,” BVR Mohan Reddy, Nasscom chairman, said in his keynote address.
Nasscom also decided to deploy technology to track how people attend its sessions. All attendees, except the media were given RFID tags for registration. “It’s all big data, they can track who is in which session,” one person was heard saying.