The Hindu Business Line : TCS capex set to increase by 55% to Rs 1,800 cr

Mumbai June 22 Tata Consultancy Services (TCS) has set a higher capital expenditure of Rs 1,800 crore for fiscal 2007-08 against Rs 1,165 crore last year, an increase of 55 per cent. It was Rs 950 crore in 2005-06.

TCS' closest competitor Infosys has pegged its capital expenditure (the expenditure used by a company to acquire or upgrade physical assets), for 2007-08 on similar lines - between Rs 1,800 crore and Rs 1,900 crore. Speaking to Business Line, a TCS spokesperson said that Rs 1,300 crore will go as investments in physical infrastructure such as buildings and real estate while Rs 500 crore will be used for enhancing technology.

"TCS is currently in an aggressive growth phase. We have increased our investments substantially this year in order to ensure smooth collaboration among TCS' centers across the globe and to deliver certainty to our clients," said the spokesperson. The Mumbai-based TCS, which is targeting a revenue base of $10 billion by 2010, employs about 89,000 professionals in 47 countries worldwide.

TCS has 71 overseas delivery centres and 41 centres in India. In fiscal 2006-07, TCS had spent Rs 800 crore on physical infrastructure and around Rs 365 crore on technology.

TCS also sees aggressive growth happening in Latin America and to cater to the robust demand the company will double its Latin America headcount in the next three years to 10,000 from 5,000 at present, Mr N. Chandrasekharan, Global Head of Sales and Operations, told Business Line. "We are getting large-scale transformational, outsourcing as well as package implementation deals from Latin America. Outsourcing from US, Spain and Portugal are the major drivers of growth in this geography," added Mr Chandrasekharan. Further, the company will be expanding operations in Chile within the next 12 months as it is being touted as the regional BPO hub for Latin America, he added.

By 2007-end, the company intends to set up a 500-seater delivery centre in Mexico which will largely focus on IT services and BPO.

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