TCS deal pipeline getting fuller

Tata Consultancy Services (TCS), the largest IT services company in India, has said that it is seeing some traction in deal enquires in most of its verticals, apart from manufacturing and telecom, as markets have improved in the past two months.

The company is looking at large deals, in the range of $100-$500 million (Rs 500-2,500 crore), for 3-5 years, from international customers.

In niche segments such as SAP or Oracle, it expects Rs 25-100 crore deals.

“The essence of the deal pipeline is there, which was not the case a couple of months ago. We are seeing increased activity on deal enquiries from new and existing customers. The first quarter was an excellent one and when things start picking up, we will emerge even stronger. The drastic downturn is behind us as there is no more a downward spiral. By December, we will know how spending patterns are going to be in the next year,” TCS chief executive officer S Ramadorai said.

The company expects annualised revenues of $30-$100 million flowing in from the $2 billion IT vendor consolidation deal from UK-based BP which it won along with IBM, Accenture, Infosys and Wipro.

The revenue would start trickling in from the third quarter, Ramadorai said. TCS will increase its hiring from the next quarter onwards to service the deal.

The company earlier said it will hire 18,000 employees this fiscal. It is also looking to transfer its onshore employees to offshore locations to cut costs, as clients have become more receptive to it. It moved about 1,000 onshore jobs last quarter.

“Pricing is somewhat stable but there are exceptions, especially in sectors like manufacturing and telecom which still need to be watched. Areas like banking financial services and insurance (BFSI), utilities and life sciences are recovering much faster,” Ramadorai told DNA.

The company is also looking to double its domestic revenue to $1 billion in the next three years, where the government contributes 40%. The domestic market currently contributes 10% to its total sales.

Ramadorai, who is to retire in October at the age of 65, will be a non-executive board member after that and would concentrate on increasing brand awareness. “I am looking to guide strategy direction as needed by the management at that time, and also would get into talent nurturing and building,” Ramadorai said.