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Our Bureau

Bangalore , Sept 1

TATA Consultancy Services and Infosys Technologies said on Thursday that the ABN Amro deal would not have any impact on their profit margins.

"Though our pricing was attractive, there will not be any impact on the margins," said Mr S. Mahalingam, CFO, TCS. The company expects revenues to flow from the `committed business' of the ABN Amro account from next quarter onwards, he said.

Mr Mahalingam said the revenue flow from the euro 200-million deal would be uniform throughout the term of the deal. Referring to the take-over of the ABN Amro employees, Mr Mahalingam said that the details were not yet worked out. It is said that TCS would be taking over some 200 employees of ABN Amro as part of the deal.

The Chief Financial Officer of Infosys, Mr T.V. Mohandas Pai, said there will not be any impact on the margins and that the company will start working on executing the deal soon. Initially, majority of the work would be executed onsite, which will be brought offshore within three to six months, Mr Pai said.

Infosys, Mr Pai said, would not be absorbing any employees of ABN Amro as part of the deal, and expects to leverage its Chinese operations to execute the Asia Pacific part of the deal, mainly in Hong Kong and Taiwan, he added.

Mr Mahalingam said that the deal establishes the scale of TCS' Latin American Operations and positions the company as a key IT player for the region. The ABN AMRO contract will provide an ideal platform to grow in emerging markets in Latin America and continental Europe, he added.

Mr Dheeraj Sachdev, portfolio manager at ASK Raymond James said that as the ABN Amro deal emerges from Europe, it shows that the global outsourcing bandwagon is spreading from the US to Europe, which has been traditionally slow in outsourcing, Mr Sachdev said.

Referring to the possible impact on the profit margins of Indian vendors, Mr Sachdev said that typically large deals could carry an element of discount as far as pricing is concerned. "It is too early to comment on the profit margins, but could lead to higher margins if productivity is enhanced."

Given the size of the deal it does not appear that this would lead to the revision of the guidance, in case of Infosys, Mr Sachdev said. "It needs a few more such wins."

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