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Mr N. Chandrasekaran

Our Bureau

Mumbai, July 17 Tata Consultancy Services (TCS) will continue with its strategy of mitigating the slowdown in the banking and financial services segment by increasing revenues from areas such as manufacturing, utilities, retail and others

Globally, the banking and financial services business is under tremendous pressure owing to the concerns associated with the sub-prime crisis and the resultant recession in the US. This quarter saw a dip of 11 basis points from this segment for the city-based company. TCS generates 44 per cent of its revenues from the BFSI segment.

On the other hand, as a percentage of revenues, manufacturing grew by 110 basis points while retail was up by 40 basis points during the June quarter. These two verticals together account for about 20 per cent of the software exporters overall revenues.

Transformational deals - generally larger ticket engagements – may have been put on hold in the BFSI space; however transformational engagements are still up for grabs in other sectors such as energy & utilities and retail, according to Mr N. Chandrasekaran, Chief Operating Officer and Executive Director.

A day ago, TCS announced a seven per cent rise in net profit for the June quarter at Rs 1291 crore. The $6-billion company is currently pursuing about 20 deals, three of which are related to platform-based BPO or human resources outsourcing.

The company had already formed a separate business unit to market its platform BPO offerings.

Going forward, TCS expects growth in Europe to be faster than company average. However, analysts claim this would be predominantly due to the small base operation the company has in Europe.

However, TCS is confident of growth in the US geography as there is ‘much more clarity now’ as compared to previous quarters.

“We now know of client-specific situations, which is a comforting factor,” said Mr Chandrasekaran. The company is referring to two of its top 10 clients, which did not generate revenues as anticipated in the previous quarters, leading to muted bottom line growth for the company.

TCS has cash and liquid investments of more than $1 billion, parts of which the company will deploy if it finds the right target for acquisition.

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