TCS bullish on government deals worth Rs 3000 crore

Tata Consultancy Services (TCS) is looking at Rs 3,000-crore government projects to help it double its revenues from the domestic market in three years.

The country’s largest IT services company is chasing 24 projects related to technology implementation in railways, defence, power and several state governments. The company hopes to bag a large number of these projects in the coming 12-18 months and double the share of its domestic business to 10% in three years. “We expect to increase domestic revenues to double digits by 2012,” said Tanmoy Chakrabarty, vice-president and head of global government industry group at TCS.

The increased activity in the domestic market - particularly from underpenetrated government departments and ministries - will help the portfolio of the export-focused domestic IT services firms as the global slowdown has seen their growth tapering off.

“Prior to elections, decisions were on hold. But now with the new government settling down, we expect quite a few large projects to be announced in the domestic market in 12-18 months,” said George Paul, executive vice-president for marketing at HCL Infosystems. HCL is also pursuing technology projects related to power, telecom and computerisation of municipal corporations in several states.

Infosys Technologies, the country’s second-largest IT services company, is similarly pursuing opportunities in the domestic market. The Bangalore-based company’s nascent India business unit has bid for defence, telecom, railways and some power projects. The company was unavailable for comments as it is observing a mandatory silent period before announcing its financial results for the second quarter.

In a recent interaction with ET, Infosys’ India business unit head Binod HR had said, “Given that the government is technically underpenetrated, there are a large opportunities to tap. We will be pursuing them.” The company had recently bagged a 10-year e-business project from the ministry of commerce.

Small to mid-sized companies such as Mumbai-based Spanco that has bagged projects in Maharashtra and Orissa see opportunity in the domestic market. “We are chasing businesses like modernising public distribution system, border check posts and developing e-districts,” said Kaustubh Dhavse, head of business strategy at Spanco.

As government departments increasingly take the hi-tech path, there will be plenty of business for locally-focused IT players.