TCS re­jects price cuts in pur­suit of new clients

Mint ST - - FRONT PAGE - Varun Sood feed­[email protected] BENGALURU

Ri­vals drop prices, but TCS is not wor­ried about pric­ing play, says COO

Tata Con­sul­tancy Ser­vices Ltd (TCS) said it won’t en­gage in a price war al­though some of its ri­vals have of­fered dis­counts to win new busi­ness.

“We are see­ing in the mar­ket some of them are drop­ping prices,” chief op­er­at­ing of­fi­cer N. Gana­p­a­thy Sub­ra­ma­niam said with­out nam­ing the com­pa­nies that are re­sort­ing to dis­counts to boost rev­enue growth. “We are not wor­ried about the pric­ing play of our com­pe­ti­tion be­cause we have al­ways main­tained you can­not com­pro­mise mar­gins to fun­nel growth.”

Ex­am­ples abound in the world of busi­ness of how re­tal­ia­tory price slash­ing re­sults in a pre­cip­i­tous drop in in­dus­try profitabil­ity. With TCS’S De­cem­ber quar­ter op­er­at­ing in­come of $1.35 bil­lion al­most dou­ble that of its near­est lo­cal ri­val In­fosys Ltd, the Mum­baibased com­pany can use other tac­tics in its arse­nal to stave off the de­bil­i­tat­ing ef­fects of a price war.

“Pric­ing alone is not the cri- te­ria. So, when we say we will be ag­gres­sive, what we are say­ing is that you need to have a so­lu­tion, the sleek­ness of the so­lu­tion, the abil­ity to cre­ate busi­ness value, and how you are com­mit­ting to growth pa­ram­e­ters (of a client). All of this makes a win­ning propo­si­tion for clients,” clar­i­fied Sub­ra­ma­niam.

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