The Hindu Business Line : Software cos earn more, from wider clientele

The attached table shows that for the quarter ended December 2003, revenues per client have risen for almost all software companies that Business Line looked at. This exercise excluded the revenues that the top ten clients contribute for all companies.

Companies that have made major acquisitions or that have gone in for several acquisitions showed the highest revenue growth per client between December 2003 and December 2002. Examples are Polaris, which merged with Orbitech Solutions in the last fiscal, and iGate Global that has acquired eJiva and IT&T, in addition to acquiring majority stake in Quintant. HCL Technologies has shown the least growth in revenues per client.

Interestingly, Wipro, which too has made acquisitions such as Spectramind, NerveWire and the energy practice of AMS Inc, has shown smaller growth in revenue per client in the December quarters as compared to growth between the September quarters.

For December 2003, most companies have also brought down their dependence on top 10 clients from levels seen in December 2002. This is a healthy sign, given that depending on a small clutch of clients for revenues is risky. On this count, only Wipro Technologies has maintained percentage of revenues from top 10 clients at exactly the same level as it was 12 months ago - 40 per cent. But, since its total revenues have increased, the absolute value of revenues from top 10 clients has decreased.

Significantly, several companies have shown a lesser growth in revenues from top ten clients than from other clients put together, between the December quarters 2003 and 2002. Exceptions to this were VisualSoft and HCL Technologies. iGate has shown the biggest growth in revenues from non-top ten clients. It may again be recalled that the past 12 months have been a period for acquisitions for the company.

On a curious note, Wipro Technologies has shown the same growth of revenues from both the top ten clients and from other clients - 41.05 per cent.

Mastek has shown a slump in revenues from top ten clients between December 2003 and December 2002. Even though its revenues from other clients have grown, its total revenues have slumped between these two quarters.