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July 15, 1999
in New Delhi
The Dataquest survey has bestowed the number one information technology group title to the Tatas this year.
The HCL Group, which lost the title to the Tatas, has strongly resented its relegation to the second position.
The Tatas' IT group companies totalled revenues of Rs 25.51 billion, showing a growth of 35.30 per cent in 1998-99 over the previous year. The HCL Group revenue has been shown at Rs 19.81 billion.
The Dataquest annual survey has not factored in Rs 6.67 billion revenue of the Bermuda based HCL Technologies in arriving at the HCL Group ranking, a company statement protested.
As a result a restructuring exercise, the HCL Group has ended up showing a negative growth of 13.27 per cent over last year.
The survey has not included revenues from the Bermudas because the export earnings by HCL from there have not come into India and the billing has not been India specific.
HCL's Sharad Talwar is furious.
''We know who is number one. We cannot care less about this survey,'' he has declared, questioning the rationale behind survey's inclusion of Tata-IBM'S revenue of Rs 4.8 billion in Tatas' overall ranking.
''They are so foolish that they include Tata-IBM revenue (Tata-IBM has since split and IBM has taken over the entire equity of the company) and show us in negative growth just because we are restructuring,'' Talwar said.
Dataquest Group Editor L Subramanyan has defended the survey.
''How can we take into account the Bermuda revenue which has not accrued to India. So far as the Tata-IBM issue is concerned, the split took place much later,'' he explains.
The survey has taken 50 per cent of Tata-IBM's revenue into the reckoning as per the GAAP norms because the Tatas and IBM were in a 50:50 joint venture.
The Tatas achieved an impressive growth by exacting synergies between Tata Consultancies and Tata Infotech Limited.
The survey describes the Tatas as the ''Unfailing growth engine that is chugging along thanks to some phenomenal performance on the service front.'' It also sees the group heading for ''some sort of consolidation''.
The Tatas Group, mainly comprising Tata Consultancy Services and Tata Infotech Limited, is well positioned to launch itself among the global giants, the survey comments. ''The hour of reckoning for the Tatas is already upon them. Never before has an opportunity of such magnitude come before any Indian company -- one of being superbly positioned to play the entire breadth of the software and services market, both in India and abroad and exploit the combined potential of the two Tata companies,'' the survey report said.
It is an anomaly that the Delhi headquartered HCL Group showed a negative growth. While HCL Technologies has clocked revenues of Rs 8.64 billion, the money that accrued to software exports business done from India was only Rs 2.07 billion.
''HCL's performance has been overshadowed by the restructuring that the group has undergone in the last year,'' said Dataquest, which has been doing this survey for the last 17 years.
From as many as 18 companies, the group carved out synergies and companies that number just five. If the accounting of HCL's revenues is based on last year's companies and revenues of all HCL companies were combined, then the growth works out to 16 per cent. Since HCL Technologies was incorporated in Bermuda, revenue of Rs 6670 million was not factored in the group revenues.
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