TCS bets on local market, aims to double revenue

IT giant Tata Consultancy Services (TCS) is betting big on the Indian market. The firm that has crossed $500 million in annual revenue in FY09 from the country expects to double its revenue figure in the next three to four years.

Natrajan Chandrasekaran, executive director and chief operating officer of TCS, said, “We are doing well in this market in sectors like BFSI, utilities, telecom, retail and e-governance. The growth rate is in double digits. Considering that, we are seeing IT spend increase in this market, we expect revenues of over $500 million to double in 3-4 years.’’

Chandrasekaran said that India along with other emerging markets like Asia-Pacific, West Asia, Africa and Latin America would be the key focus area for TCS. “We expect to grow at much higher growth rates in these geographies,’’ he added.

These four regions including India accounted for $1.1 billion, or 19 per cent, of the total revenue of $6 billion in the fiscal year 2008-09 — this is equal to the income TCS derives from just UK.

But with the economic downturn and its impact on IT spending in their main markets of the US and Europe, Indian IT companies are increasingly turning their focus to domestic clients and emerging markets.

However, Chandrasekaran did admit that the percentage of annuity revenues in these markets was lower than in mature markets. “There are more project-based transactions and hence we need to win more projects to sustain revenues,” he opined.

With respect to deals in the pipeline, he said, “The difference between deals now and one year ago is that earlier contracts were delayed or cancelled because market uncertainty was not foreseen by clients. It became difficult for these proposals to come to fruition. The scene has changed now with companies proposing deals keeping the conditions in mind.’’ He added that the deal flow this year would be normal.