Tata Consultancy Services, India’s largest information technology services provider, is witnessing positive movement in its engineering and industrial services (EIS), which was impacted by the economic slowdown.
It maintains that if the current uptick continues, the unit’s contribution to the revenue of the company could touch 10 per cent for financial year 2010-11 from the current 6-6.5 per cent.
“In the third quarter, we have seen some sporadic positive signs from customers. Customers are talking about opening up their production design and product additions have started showing a positive trend, which was impacted due to the slowdown. Because of this, we have started to hire as well,” Regu Ayyaswamy, Vice-President, Engineering and Industrial Services, told Business Standard.
Close to 30-40 per cent of the existing client base have shown positive signs of ramp-ups. TCS has close to 250 customers under its EIS division. Because of these positive signs, the unit would be hiring around 100-200 people by the end of December. The total headcount of the unit is 6,500.
Ayyaswamy said the positive news is coming from clients in sectors like electronics, semiconductors, telecom and auto. Whereas, heavy industry still continues to be under pressure.
In terms of growth, Ayyaswamy said healthcare and utilities have been the most promising. “The healthcare segment actually continued to grow even during the downturn. We saw a volume growth of two to three per cent during the slowdown. We do close to $30-35 million business annually; there is opportunity to take this to $100 million in a year’s time,” he added.
The other reason for the uptick has been a shift within these companies to look at India as a market, which needs these products to be tweaked according to the local factors. This is a huge opportunity for companies like TCS. The other area that has seen a positive movement is the utility sector. Ayyaswamy is of the opinion that this could see a volume growth of 2-3 per cent in the next quarter.
