TCS sees robust demand for IT outsourcing in new fiscal

Bangalore, March 7 (IANS) Global software major Tata Consultancy Services (TCS) Monday asserted that demand for IT outsourcing across verticals would be robust in the new fiscal (2011-12) owing to discretionary spending and higher budgets.

'Overall, demand environment is good and getting better as we see IT spending across verticals, including BFSI (banking, financial services and insurance), retail, pharma, hi-tech industry and manufacturing,' TCS chief executive N. Chandrasekaran told reporters here.

Noting that demand for IT outsourcing in the US, which is the largest export market, was growing and much better than in 2010, the top executive said it (demand) was on the recovery mode in Europe though slightly behind the curve.

With the resilient Indian IT industry returning to double digit growth path during the second half of this fiscal (2010-11) after the tech meltdown due to global financial crisis and recession in fiscal 2009-10, Chandrasekaran said the growth opportunities were unfolding as evident from a robust demand pipeline.

'As IT products and services drive efficiencies and businesses of enterprises worldwide, we are seeing multi-year deals happening and new projects on anvil. Though the manufacturing industry has been slow to pick up, it will get better in the next few quarters on spurt in demand for goods and services,' he pointed out.

Though TCS does not give quarterly or annual revenue guidance unlike Infosys and some other IT firms, the chief executive said with a repeat business of 95-97 percent and pricing looking up, the outlook for this quarter and fiscal was bright on annuualised basis, as evident from about 30 percent volume growth in the third quarter (Oct-Dec) of FY 2011.

'In light of the anticipated growth and demand for outsourcing surging, we plan to ramp up our capacity by hiring about 37,000 jobs in the ensuing fiscal (FY 2012) through campuses and direct placement for freshers and laterals,' Chandrasekaran said.

The $6-billion IT bellwether is investing about Rs.1,500 crore in its Thiruvananthapuram facility in Kerala to train about 10,000 freshers at a time.

As the country's largest IT bellwether, TCS is also set to accelerate growth through non-linear initiatives, including new software product iON cloud computing solution for small and medium businesses (SMBs).

'We are targetting $1 billion revenue over the next five years from non-linear growth by offering new products and services to SMBs and business process outsourcing (BPO) sector,' Chandrasekaran added.