Indian IT majors are waking up to the opportunity in the domestic market after years of treating it as a country cousin. They are targeting the boom in the banking and financial services industry at home and also eyeing better profit margins in the domestic market.
Recently, HCL Infosystems acquired Jaipur-based Natural Technologies (NTPL), a niche banking software product company, for Rs 8.39 crore. HCL is aiming to increase its foothold in the domestic banking and financial services segment.
With the economy growing at an average 8.5 per cent, the banking sector is looking to leverage the opportunity to transform their services to be technology driven. This has thrown up opportunities for companies like IBM, NCR and HP to target the Indian market.
"NTPL has working for over a decade developing software products for Indian banking sector which will enable us to get a foothold across banks in selling our wares," George Paul, executive VP, HCL Infosystems told Hindustan Times . Apart from basic technology services like server and PC installation, IT companies are also offering value added services like software to manage treasury and credit risk and software to manage loans.
For instance, Wipro Infotech, while announcing its fourth quarter results recently, reported that its IT Services and Products business posted revenues of Rs. 35 lakhs — a 45 per cent rise over the same period in 2007 — riding on outsourcing deals from Dena Bank and HDFC amongst others.
Six months back Infosys said it would form a separate team to focus on selling Finacle, its banking software product, to Indian banks. Tata Consultancy Services gets 9 per cent of its revenues from India as at the end of fiscal 2007. One of the reasons companies are targetting domestic market is due to increased margins. "Since 2004, margins for IT companies doing work in India is going up and in sectors like telecom, it can be comparable to any international deal," said TCS chief operating officer N Chandrasekaran when it announced a deal with BSNL, few months back.