General Electric is TCS' single-largest customer

The General Electric group accounted for 18.9 per cent of TCS Ltd's total revenues in the first nine months of fiscal year 2003-04. The group, which is TCS' single largest client, had accounted for 20.6 per cent of its revenue in 2003 and 24.4 per cent in 2002.

In the first three quarters of last year, TCS' 10 largest clients accounted for 40.4 per cent of its revenues, up from 39.4 per cent in 2003 and 37.0 per cent in 2002.

In contrast, the 10 largest clients of Infosys Technology accounted for 36 per cent of its revenues in 2004, 37.3 per cent in 2003 and 39.4 per cent in 2002.

"The loss, or a significant reduction in revenues from one or more of these clients, may adversely affect our business," TCS said in its draft red herring prospectus filed with the Securities and Exchange Board of India (Sebi).

As there is a stiff competition for the services TCS provides, and as "we are typically not an exclusive service provider to our large clients," the level of revenues from the company's largest clients could vary from year to year, the prospectus said.

Its largest clients typically retain the company under master services agreements that do not provide for specific amounts of guaranteed businesses.

These are "terminable with short notices and without significant penalties." The clients may also decide to reduce spending on IT services due to economic pressures and other factors, resulting in impacting the business of TCS, the document pointed out.

Domestic software companies Infosys Technologies, Wipro and Satyam Computer Services and global IT outfits Accenture, Cognizant Technology Solutions, Computer Sciences Corporation and Electronic Data Systems are the major competitors of TCS.