IT czars bullish on billing

TCS, Infy, Satyam, Wipro see 3-5% hike in existing contracts.

Tata Consultancy Services (TCS) MD & CEO S Ramadorai has said the company plans to hike its billing rates by 3-5 per cent for existing contracts which will be renewed shortly and 5-10 per cent for new contracts.

He had stated this at an analysts' meet after declaring the quarterly results.

His statement reiterates that the "impending" US slowdown will not have much effect on Indian IT outsourcing majors .

One may recall that Infosys too, during its second quarter result announcement, said the pricing environment continued to be stable with an upward bias of 1.2 per cent for existing clients, while there was an increase of 3-4 per cent for new contracts.

V Balakrishnan, CFO, Infosys, said ,"We see our billing for existing customer is nearly stable where as there is an increase of 4-5 per cent for new contracts." .... PPPPpro has spoken of a 3-5 per cent increase in billing rates when contracts come up for renewal and "above average" billing rates in the context of new contracts.

Satyam has spoken of a 3-5 per cent increase in billing rates for both existing and new contracts. How much do these figures translate into? To put them in context, around 97.9 per cent of TCS' business comes from existing clients (repeat business).

Its around 95 per cent in the case of Infosys; and 86 per cent in the case of Satyam. Are analysts convinced? "The point is to translate this intent into actual figures given the cut-throat competition," says Alok Shinde, ICT director, Frost & Sullivan (India).

Pradeep Uddhas, KPMG Global Head, Sourcing Advisory, says: "It's a sign that Indian IT service providers are starting to stand up and saying 'Give us our due since we have the capability'."