TCS eyes $1-bn Indian revenue

Even as its US business has been impacted by the recession, Tata Consultancy Services, India’s largest information technology services provider, expects its India revenues to double to $1 billion in the next three-four years, majorly coming from the government sector. India currently contributes 10 per cent to TCS’ total revenues.

“We are looking at three pillars in the domestic market — government, large enterprises, and small and medium enterprises (SMEs). With large enterprises, the deals could be in products and engineering services, while for SMEs, it could be cloud-based services, based on their affordability. The government offers opportunities in mission mode projects, e-governance and NREGA, among others, through a portal-based approach or a web-based one,” TCS’ outgoing CEO, S Ramadorai, told reporters here.

For large enterprises in India, it is looking at an overall deal size of around Rs 400 crore. For SMEs, anywhere between Rs 25-100 crore for niche services like SAP or Oracle-based services in analytics or data warehousing.

Of its India business, the government sector’s share is 40 per cent and the IT major has already worked on the government’s e-Passport Seva project and MCA-21.

Commenting on the deal pipeline in this environment, Ramadorai said drastic downturn is behind us and there is a demand uptake in some areas.

“Pricing is stable, except for the telecom and manufacturing clients. There is a deal pipeline in BFSI (banking, financial services and insurance), retail, life sciences and government, and enquiries are also coming from these sectors,” he added.

The pricing position is not very stable, as project cancellations happen and closures of projects might happen slowly. Also, some bankruptcies in manufacturing led to the unstable situation, he explained.

On its recent deal with BP, TCS expects revenues to start flowing by the third quarter and the deal to contribute between $30-100 million (around Rs 150-500 crore) on an annualised basis over the next three to five years.

The company also plans to relocate some people in the US as it did in the last quarter, depending on the projects. However, this number would be less than 1,000. On inorganic growth, TCS doesn’t plan to proactively go after acquisitions but would look at these if they come in the firm’s way.

“We see greater growth from markets like Latin America, APAC, Middle East and Africa compared with the mature markets. For us, the emerging verticals are energy and lifesciences. We will scale up operations in Bhubaneswar,” said Ramadorai on the company’s overall growth strategy.

What next for Ramadorai?
TCS’ retiring CEO S Ramadorai says after he steps down in October, he would make the company a more visible brand by being on the company’s board as a non-executive director. “I would be having a board position, whether in telecom or some technology space, in addition to other positions in other boards,” he told journalists here.

Personally, Ramadorai intends to nurture and build talent, beside working on Tata Sons’ super-computer and scale-play it in the fields of nanotechnology, security and lifesciences.