TCS eyes BPO units in Europe

Tata Consultancy Services is close to acquiring a couple of business process outsourcing (BPO) outfits in Europe.

"We are finalising acquisitions in the banking space and have zeroed in on a few companies in France and Germany," TCS Executive Vice-President Phiroz Vandrevala told Business Standard.

This will be the second overseas acquisition by TCS in the BPO space. Last month, TCS had acquired a BPO firm in Chile.

"The company will continue to acquire firms till we have a substantial presence in the BPO business and for the next one year, the focus will be only on European markets," said Vandrevala.

The company is also hopeful of clinching two outsourcing deals of over $100 million each. Vandrevala said the deals were likely to be finalised over the next one-two months. While one deal was stuck with the UK's largest telecom vendor, the other was with one of the biggest banks in Europe, a company executive added.

TCS is targeting to increase its revenue from the BPO business to $200 million over the next two years, up from $45 million at present. The BPO segment accounted for a small fraction of the company's revenue of $2.3 billion in 2004-05.

In comparison, the BPO business of Wipro contributed $148 million to its revenue of $1.86 billion. Infosys' BPO revenue was $43 million out of its total revenue of $1.6 billion.

"We started late and now we have to catch up. The company is hoping to quadruple its revenue to $200 million from the BPO business over the next two years," Vandrevala said.

The company is also ramping up its BPO head-count from 2,500 employees to about 4,500 over the next 12 months.