For India’s top tech firms preparing to announce their first quarter earnings later this month, rising salary costs, weakening euro and pressure on billing rates continue to threaten profitability.
Meanwhile, finance ministry has cut down the budget of the Unique Identification Authority of India (UIDAI) to Rs 3,000 crore from Rs 7,000 crore.
Here is a weekly roundup of the latest happenings in the IT sector.
For India’s top tech firms preparing to announce their first quarter earnings later this month, rising salary costs, weakening euro and pressure on billing rates continue to threaten profitability, even as they return to double-digit revenue growth helped by renewed demand from top outsourcing customers in the US.
At least six analysts tracking the sector told ET that while companies such as TCS, Infosys and Wipro could see their quarterly income rise by around 4-6% sequentially.
The tumbling euro, along with rising wages, is set to dent profits by 1-2%.
India's leading information technology exporters should report robust quarterly sales, thanks to improving demand from their mainstay financial clients, but Europe's debt crisis and rising salaries could cap their outlook.
Tata Consultancy Services, Infosys Technologies and Wipro Ltd face uncertainty on orders from Europe - the second-biggest market for the sector after the United States.
"There has been no major impact on volume growth due to the crisis," said Harit Shah, an analyst with brokerage Karvy Stock Broking.
The Indian IT industry’s 20-year relationship with General Electric-its oldest and perhaps its only billion-dollar customer-has been a love-hate affair.
The amount of work the company gives out makes it hard for Indian IT companies to ignore it. But the terms it demands and the way it works make them wish they could.
A few weeks ago, a group of GE’s empanelled IT vendors logged on to an hour-long conference call with the company. At the end of it, they found out that all the fuss by the American company was to invite bids for a one-person project for a subsidiary in India.
Chennai-based Sify Technologies, provider of enterprise and consumer internet services, has proposed to take up the laying of an international undersea cable project, connecting Delhi and Singapore, Sify Technologies, chairman and managing director, Raju Vegesna told ET.
The discussions in this regard are in nascent stages. He didn’t divulge further details about the project. This will be in addition to the project the company has on hand.
It has already entered into an agreement with Middle East-based submarine cable operator Gulf Bridge International to lay an international undersea cable to India, which will enable telecom operators and other communication companies to connect in the region.
UPA's ambitious project to assign a unique identification number to a billion citizens has been dealt a hard blow right at the outset, with the finance ministry slashing its budget by more than half.
Sources said that the expenditure finance committee has cut down the budget of the Unique Identification Authority of India (UIDAI) to Rs 3,000 crore from Rs 7,000 crore.
The severe pruning of the budget will force the UIDAI to issue only 10 crore UID numbers instead of the 60 crore it had originally planned for the first phase.
HCL Infosystems on Thursday said it has acquired a 60 percent stake in NTS Group, a leading Dubai-based IT services and solutions company.
Though the company did not divulge the the size of the deal, according to market analysts, it was about $6.5 million.
The acquisition of NTS will now help HCL Infosystems expand its presence in the Middle East and African markets.
Mahindra Satyam, the new brand identity of Satyam Computer Services Ltd, on Wednesday announced the launch of an Offshore Development Centre (ODC) for BASF IT Services at one of its offices in Chennai.
The ODC was inaugurated by Dr Ralf Sonnberger, Managing Director, BASF IT Services in the presence of an executive delegation from BASF IT Services and Mahindra Satyam.
The state-of-the-art ODC for BASF IT Services housed in Mahindra Satyam's development centre in Chennai provides managed services for the company's extensive installed base of SAP, messaging and groupware as well as user administration.
Nearly half of new middle- and senior-level staff at top tech firms — including Accenture, Cognizant, Mindtree, HP-Mphasis and Wipro are going to be hired from social networking sites such as LinkedIn, company officials and experts tracking the sector said.
Tech firms are now realising that middle-to senior-level managers and leaders are best hunted from platforms such as LinkedIn, where professionals are not necessarily disgruntled job seekers.
For instance, Accenture, the world’s second-biggest technology consulting firm, plans to hire nearly 40% of its new staff over the next few years through social networking sites such as LinkedIn. And the consulting major is not the only tech employer riding this trend. In fact, software maker Oracle famously found its CFO Jeff Epstein through LinkedIn way back in 2008.
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