Tata Consultancy Services has said that higher visa rejection rates had not impacted revenue or growth, but instead put “pressure” on project planning and execution.
“The visa rejection rates (for US) have gone up definitely…It is higher compared to one year ago, but over the last six months it is more or less the same,” Mr N. Chandrasekaran, CEO and MD of TCS, told reporters here.
An intense visa scrutiny, hike in visa application fee and higher rejection rates have caused a significant heartburn in the Indian IT industry.
Every year, the industry applies for a large number of H-1B visas to send employees to work at the client locations in the US.
In fact, brokerage house CLSA in a report on the industry a few months back had flagged the doubling of rejection rates for H-1B and L1 visas.
Last month, CLSA in a note downgraded TCS and Infosys to “underperform” from “outperform” due to weaker revenue outlook and travel visa issues. TCS had, however, hit back at CLSA's view.
Speaking to reporters here on Monday, Mr Chandrasekaran said that the company was spending more time in planning the project execution, than before. “That is the major impact (of visa issue),” he pointed out.
“So we have to plan better… it may be local recruitment or planning for visas well in advance,” he added.
But, none of it was affecting the growth or revenue, he added.
“We have delivered 7.4 per cent volume growth this quarter (sequentially), grown in all markets, so we did execute projects. Did I lose growth due to visa - the answer is no. Did I have to work harder for growth - the answer is yes,” he said.
Attrition rate
On attrition, he said that the company wanted its IT attrition to be below 10 per cent (currently hovering around 11 per cent).
Overall, the blended attrition rate was 14.8 per cent. It was lower in case of IT and higher for BPO.
Asked about the pricing pressures, Mr Chandrasekaran said that the company expects pricing to go up, as a result of continued demand for tech services.
“A combination of continued demand and the type of work we do, which is complex and transformation deals, will result in increase in pricing,” he said but did not give a timeframe for achieving this.
The pricing for June quarter was, more or less, stable.
The TCS honcho further said that the company had negotiated about 2-3 per cent pricing increase in certain deals over the last few months. “But there were not sufficient number of deals (with pricing increase) for it to reflect in the numbers,” he said.