TCS, Infosys see signs of recovery on order flow

Customers are continuing to work with offshore outsourcing companies to lower their operational costs by 20-30 percent

 

India's top two software exporters TCS and Infosys are seeing the first signs of an economic recovery as their top customers start discussing outsourcing contracts in order to further reduce their operational expenses. For instance, customers of Infosys, which signed over $100 million contract with Australian phone firm Telstra earlier this month, are now saying that the worst may be behind them.

 

"There is a lot more confidence among our clients; they feel that the worst is behind them. Especially in the US, many customers are saying that they were aggressive in reacting (to the recession)-they cut costs and renegotiated contracts," S Gopalakrishnan, chief executive of Infosys said. In a year when both Infosys and TCS have cautioned their investors on lower to negative growth in revenues, India's $40-billion software exports industry is going through one of the toughest recessions in over two decades.

 

TCS, which counts Citigroup and GE among its top customers, is also seeing the first signs of recovery when it comes to the IT spending. "We are seeing a recovery, but at a slow pace. The overall decline is slowly getting arrested. The recovery is showing but can't predict the slope of this recovery," N Chandrasekaran, chief operating officer, TCS said. Despite, financial problems and tightened IT budgets customers continue to work with offshore outsourcing companies in order to lower their operational costs anywhere between 20-30 percent.

 

Source: The Economic Times