See disruption in the business model of IT sector companies: Suresh Senapaty, ex-Wipro CFO

By: FE Online | New Delhi | Published: August 30, 2016 1:48 PM

Suresh Senapaty, ex-Wipro CFO, on Tuesday, said that the IT sector has moved on to be a utility segment with 90% of its spends to be in digital segment. Speaking to Bloomberg TV India, he said, “I see a disruption in the business model of IT sector companies and technology upgrades will keep the sector’s growth stable.” Last week in an analysts call, Infosys CEO Vishal Sikka had said that India’s second largest software exporters lost a multi-million pound deal with the Royal Bank of Scotland. The Bangalore-based company had lowered its annual revenue growth guidance to 10.5-12% from the earlier 11.5-13.5%.

Senapaty said that the traditional way of doing business was undergoing a significant change and growth momentum would build up in 2017, 2018. “Guidance has not seen a significant change for IT companies; the overall sector is expected to perform well. Not all tech companies can be put into a ‘Good Growth’ basket. I don’t see growth concern in the next few quarters,” added Senapaty. The Information & Technology sector is in a state of flux, driven majorly by two factors margin pressures and adaptation of emerging automation and artificial intelligence tools.

On Brexit, Senapaty said, “The effect of Britain’s exit from the European Union is yet to pan out and there is low clarity on how it will impact companies. We may see Brexit impact in the near-medium term. I don’t see a collapse of the sector due to Brexit.” The business potential for Indian IT and ITeS companies is huge, but they need to work consistently on innovation service quality and cost to attract the rest of the world to continue to invest in India for their offshore/non-customer interface job centres in India, suggested GlobalHunt MD Sunil Goel to PTI.