With software products and platforms driving growth for Tata Consultancy Services, India is turning into a new frontier for the company. “We are going to be launching a platform specifically for India very soon,” TCS Chief Operating Officer NG Subramaniam, told BusinessLine.
Launching an India-specific software platform will allow the company to accelerate growth here. The Indian market is growing much faster than the company’s largest market, North America. For the quarter ended 31st of December, North America market revenues grew only 4.1 percent for TCS, while India revenues continued to grow faster, at 6.4 percent, despite the challenges being faced by the Indian economy.
Nearly 6 percent of TCS revenues come from the India business, bringing in over a billion dollars in annual revenues. For the nine months of the current financial year, India revenues stood at ₹6,784 crore, up nearly 10 per cent from ₹6, 174 crore in the same period last year.
India is also a highly under-penetrated market for most Indian IT services companies, which have so far largely focussed on the US and Europe markets for higher margins. But with growth slowing in those markets, India is turning into a lucrative bet for most.
Moreover, while services revenues were largely flat for TCS in the recently reported third quarter, many software product and platforms are growing in excess of 50 percent year on year.
Software platforms bring in better margins for TCS compared with services revenues, allowing it to target a better margin profile from Indian customers who were so far reluctant to pay for services at international rates.
Acceptance for software platforms is much higher today than it was a decade ago, said Subramaniam. “The industry is looking at how they can move parts of the value chain into platforms and then convert that into a marketplace. Today, interoperable technology allows this to happen and we are well-positioned to make that happen. For example, we are well-positioned in financial services with platforms across the value chain. On our algo retail platform, we have added 12 new retail customers in the last 4-5 months,” he said.
“Converting platforms to a marketplace is the next big trend for which we have to stitch up the ecosystem. We have started doing that in the BFSI space where we have brought our customers to participate,” Subramaniam added. He, however, refrained from sharing details of the upcoming India-focused software platform.
The software and platforms business is already worth over a billion dollars for TCS, while growing at the highest pace. “Different products have different growth trajectories. If you take Ignio, it is growing upwards of 50 per cent. TCS BaNCS is growing in excess of 20 per cent. Other smaller products are growing closer to the Ignio kind of profile,” said Rajesh Gopinathan, CEO of TCS.
Source: The Hindu