Over the last 10 days, as the big four among India’s IT firms — Tata Consultancy Services, Infosys, Wipro and HCL Technologies — announced quarterly results that beat market expectations, a message rang out loud and clear: they have broad-based their revenue models and no longer rely solely on the US and its financial services sector for growth.
It may still too early to write paeans about their strategy, but it is important to appreciate that good quarterly results are not the sole result of a weak rupee, and have come in an uncertain global environment as corporations and governments talk of slashing their IT budgets and holding on to cash.
Kumar Parakala, head of IT for Europe, West Asia and Africa at advisory firm KPMG, said these companies have, with theri IT solutions, helped their client firms to reduce costs and stay competitive. “Indian firms have successfully aligned their IT solutions to fit the investment priorities of a client firm,” he said.
In the current scenario, companies hold off expansion, and look to cut costs. The IT service provider can provide a solution.
And this is how the big four have grown, Parakala said.
"A little bit of cautiousness is still present but there is optimism for turnaround IT solutions,” said Suresh Senapaty, executive director and CFO, Wipro.
A couple of years ago US and the BFSI (banking, financial services and insurance) were key revenue drivers for Indian IT, accounting for 60% to 70% of sales.
US stays the largest market and BFSI an important sector, but revenues from Europe have seen a steady rise. So have business segments such as manufacturing, retail, energy and life sciences.
Companies are offering specialised services such as business analytics, consulting, technology infrastructure services and enterprise application services that require specialised skill sets beyond labour arbitrage.