CEO Amur S Lakshminarayanan, who took over nine months back. Speaking to ET in his first media interaction since taking over, Lakshminarayanan though said that Covid-19 has impacted its deal pipeline, delaying conversions and is hopeful that the second half of FY2021 will be better than the first. He added that high debt continues to be a problem and the company is looking at various options to bring it down, including infusing equity, paring investments and selling its land parcels.
Edited excerpts:
What has changed for the company since you took over?
First, how we can enable borderless growth. Second, so if you look at the B2B manufacturing world, people have shifted from purely manufacturing products to shifting to services. How do I do service them? Third, continuing focus on efficiency and productivity, digital through automation; fourth, managing risk; and fifth, how do I bring agility to the organization?
From our customers standpoint, the shift that we’re making is rather than see ourselves as product, we are going to more solution oriented…combining products to deliver them as platforms and solutions to our customers.
What are the biggest challenges and opportunities for Tata Communications in the COVID-19 scenario?
Immediately after lockdown many of our enterprise customers were asking how do I work from home effectively? Our teams did a phenomenal job of helping thousands of users and more than 150 enterprise customers to work from home. Post covid, the way I see things are the customers will now want robust work from home solutions.
And the challenges?
The pipeline conversion in my opinion would be somewhat slow because what has been in the pipeline or ready to close has been sort of closed. We are discussing with the customer how we can help them bounce back or transform…in many places even if they were to award a contract…it will be highly difficult for us or our partners to go and install the equipment and connect.
In our opinion, while the pipeline is strong, we have to wait and watch for the conversion.
Would FY21 be worse than FY20?
I think things will improve in the second half. People would want to look at more innovative ways of reaching out to their consumers. E-commerce would pick up, collaboration would get stronger.
What is your debt position? Are you comfortable with it? How can you bring it down?
We can’t be comfortable with debt position. We need to find ways of infusing equity or we need to have debt or operationally produce enough cash flow to continue to invest.
We have disposed of our data centre business but we are strategic partners and have a 26% investment in there. After the land parcels given to the government, we still have tracts of land within Tata Communications which can be looked at. We have other investments…
(As of March 2020, Tata Comm had a net debt of Rs 9176 crore)
Tata Consultancy Services has said it is aiming to have 75% working from home over time. What is Tata Communications’ plans?
Today 98% are working from home. But we still have to monitor the network, fix things when they go wrong. I anticipate that when it shifts back to normal, whenever that happens, it will shift back to around 50-60% still working from home.