‘Expecting solid revenue growth on stabilizing tech spend’

For FY24, do you expect BFSI and other strong sectors to stabilize in the near term?

We’re already seeing several business verticals stabilize, and others should stabilize soon. This should help us deliver strong revenue growth irrespective of projections.

Moving forward, an important factor to note is our software business — it has performed very well, particularly in the last two quarters which have been seasonally weak. This propelled our software segment to cross $1 billion in annualized recurring revenue (ARR) in the March quarter. Our revenue from the software segment grew 3-5% annually at the end of each of the last four quarters through fiscal 2023.

Is there any specific vertical that you are focusing on in FY24 keeping in mind the macroeconomic projections?

There are two or three areas that we are focusing on. The first is ESG and sustainability, which offer tremendous business opportunities. We already have several minimum viable products within the ESG and sustainability paradigm, and in the coming year, we plan to incubate and significantly scale up this segment.

Our second segmental focus is to understand how we can have generative AI as a critical solution component across all of our businesses. We’re still developing it as a business segment to see how we can leverage it.

Are you seeing any projection of caution and reduction in discretionary tech spend among customers?

Yes – technically. Some customers would consider spending in new technologies, such as generative AI, discretionary. However, they also know they’re about to be left behind if they don’t at least start investing in new tech areas. It’s the same thought process that we’ve seen in our digital services business.

AI and sustainability are areas that customers are looking to invest in so they don’t get left behind by the rest of their industry. Some expenses can technically be avoided in the short term, but this comes at the cost of creating differentiation in the long run from a business perspective.

Will pursuing these new verticals require significant cost and effort in terms of upskilling your workforce?

If we take generative AI as an example, we already have a set of people who are pretty strong in programming, and even in specific languages ​​like Python and others. They can be upskilled fairly easily to help us build some of the generative AI solutions we’re seeing. But, there is more to a business analyst role than just the technical aspect which is what we need to bring for such roles. They will be important for a business to look at, evaluate which are the most labor-intensive operations, and how some of those can be enabled through generative AI. This is an area that we will focus on along with technical skills.

Beyond generative AI, are niche new-tech applications like quantum computing driving client interest?

It’s still very early days for quantum computing, at least for service providers. This is an area that is a strong area of ​​interest for technology infrastructure manufacturers and tech-specific companies. But, it is important to understand that even in the case of Generative AI, one of the constraints is the amount of compute power and cloud capacity required to learn and apply AI models, which restricts the development and applicability of a lot of applications. This technology now. At some point, quantum applications may factor into businesses the way generative AI has.