Indian information technology vendors may be missing an unfolding opportunity in the current American recession, Gartner India, the research firm, has warned.
India's largest software exporter, Tata Consultancy Services (TCS), says it will see more deals in its infrastructure services (IS) business in the $5-10 million range this year than in the $15-100 million one.
While the exact number of employees being asked to quit could not be confirmed, sources said close to 1,000 employees were tipped to go. Syntel has around 11,000 employees in India. The shifting of employees to the KPO operations is part of increasing its utilisation and reducing the bench strength.
For TCS, the retail business has been growing at 10-12 per cent over the last three quarters. On a year-on-year basis, the growth rate of the retail business has been impacted due to currency fluctuation and the general slowdown. In dollar terms, the retail business grew 51.6 per cent for the company last financial year.
Capgemini has gone back on its previous expectations of modest growth in the first half of 2009, following a significant deterioration in the wider economic environment since the third quarter, said John O'Brien, senior analyst at advisory and consulting firm Ovum. Capgemini now expects to see a modest decline in the first-half sales, while maintaining an operating margin of 6.5 per cent.
Tata Consultancy Services, the country's largest IT company, has changed its hiring strategy and will focus on just-in-time hiring or real-time talent management."TCS has decided to adopt the policy of real-time management whereby we will hire in the last three months of the final year of graduation rather than a year before," said S Ramadorai, managing director and chief executive officer, TCS.
Meanwhile, 117 Pan-Asian private equity players - with India as focus -- aim to raise funds worth $59 billion, says UK-based Preqin, an alternative assets research and consultancy group. On a global platform, he said, majority of investors remain positive towards private equity. Aditya Birla Private Equity is an example.
Post-Satyam, brokerages asked to do stricter checks of financial records.
On the last day of Satyam's stint in India's benchmark indices - the Bombay Stock Exchange Sensex and the National Stock Exchange S&P CNX Nifty - its shares turned out to be a punter's delight.
Information technology firms, which are already in trouble due to the slowdown in their key markets, are now facing payment delays. Many firms said collections cycles (receivables) are getting extended.
Mutual fund investors may soon have to give separate cheques to distributors as commission.
Venture capitals in India, which traditionally invested in urban segments or technology sector, have begun investing in rural-centric technology firms. Avishkaar India Micro Venture Capital Fund, Acumen Fund, and Rural Innovations Network are showing increased focus on rural markets.
On the back of a global meltdown, big-ticket firms may not be flocking at the premier Indian Institute of Technology campuses. IITians, however, have not lost all hope. Many are looking at start-ups for their first jobs.
The proposal to scrap 'indicative portfolios' has arisen because investors have sometimes found deviations of as much as 80 per cent between the indicative and actual portfolios. In some cases, the entire corpus has been invested in a single instrument. Sebi will also consider Amfi's suggestion of a 3 to 6 per cent exit load for FMPs, a minimum tenure of three months and a faster processing of redemption payouts,
Ben Verwaayen, CEO, Alcatel-Lucent, does not consider India as a low-cost destination. Rather he does not like to use the word offshore in the context of India. "If it is just about cost then I would not have been in India but to some other low-cost country. For me, India is a high talent country," he adds. As the person who was heading British Telecom's operations before taking over Alcatel-Lucent, he has pushed over a billion dollar of outsourcing work to India.
The IT industry, which has already taken a hit of more than Rs 500 crore in the second quarter because of the appreciating dollar against the rupee, will now be hit by adverse cross-currency movements even as they attempt to boost the share of revenue from the UK and the Eurozone. Unfortunately, the hit will be despite attempts by software makers to step up hedging in the pound and the euro. The IT industry earns about 60 per cent of its revenue from the US.
Industry insiders as well as sector experts said that companies are unlikely to miss this opportunity to rationalise bloated boom-time salaries.
In fact, firms like NIIT Technologies and EXL Services are already reaping the benefit of the first- mover advantage with over 20 per cent of their revenues coming from non-linear business in the quarter ended September 30. A non-linear business' focus moves away from the tendency to measure growth on the basis of headcount or the concept that the more the number of people working, the more the revenue.
Sebi wholetime members T C Nair and M S Sahoo passed the 26th such consent order on October 31, asking Bansilal Mehta and Chimanlal Shah to remit Rs 4,26,000. Mehta and Shah 'were alleged financiers to key operators for cornering shares in the IPO of IDFC', the order said. The regulator had earlier prohibited them from buying, selling and dealing in securities. So far, the regulator has settled 128 cases through consent orders.
India's mid-cap software companies may shed as much as 10 per cent of their workforce as revenues and margins have shrunk owing to a global slowdown, analysts say.
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