'Macro Environment Trending In Right Direction'

NITIN RAKESH, CEO & MD, Mphasis, shares his insights on the post-election US business climate and much more in an interaction with Rohit Chintapali of BW Businessworld.

Given that the US is your primary market, what are your business predictions post-election with the new Trump administration coming in January? Additionally, what are your expectations in terms of deals and spending trends for FY26?

The FY26 pipeline looks very strong, largely driven by the scale of adoption we are seeing in many of these deals. I think there's more clarity now, especially around the uncertainty of expiring tax cuts and the potential rise in taxes-issues I don't believe will be a concern moving forward. This is already reflected in market trends, they are up by 10 per cent over the past 30 days or so, even the dollar is up. Overall, despite the ongoing challenges with inflation and interest rates, we're in a much better economic environment in FY2025 compared to FY2024. FY2023 was obviously a tough year for everyone, including banks, but the macro environment is trending in the right direction.

Sentiment is improving, and there's more predictability in earnings and taxes, which will likely lead to increased spending. Capital market activity, however, has been dead-no IPOs and a slowdown in M&A. It's strange given the recordbreaking performances of indices like the DAO, S&P, and Nasdaq this year, yet there is zero IPO activity.