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Our Bureau

Mumbai, Oct. 28 Despite a 15-per cent dip in sequential revenues from its consulting practice and a 2.7-per cent fall in sequential income from its domestic business for the quarter ended September 2008, Tata Consultancy Services says it is business as usual.

As a percentage of overall revenues, consulting dipped to 2.9 per cent of total revenues as against 3.7 per cent in the June quarter. In absolute terms, revenues from consulting practice have come down to Rs 201 crore in the September quarter (Rs 237 crore) .

“Consulting has not grown aggressively, especially in the last three to four months as no niche projects are happening,” said Mr N. Chandrasekaran, Chief Operating Officer & Executive Director, TCS. Consulting is part of the discretionary budget of clients and hence there is a foreseeable reduction in consulting-related spending , say analysts.

However, Mr Chandrasekaran expects companies to take to consulting in a big way going forward as the current crisis in the US has increased focus on compliance and regulatory requirements that companies have to follow.

In July last year, TCS had said that it expected revenues from its global consultancy practice to grow to $600-$650 million (Rs 2,400-Rs 2,600 crore) by 2010. In spite of the current downturn, Mr Chandrasekaran feels that these numbers are still achievable.

On the domestic business front, TCS is facing ‘lot of volatility’ due to its play in the systems integration market and association with Government entities.

The contribution of India as a proportion of overall revenues has been reducing in the last three quarters; it stood at 7.8 per cent as against 8.7 per cent in the previous sequential quarter. In absolute numbers, it has come down to Rs 542 crore compared with Rs 557 crore in the June quarter. However, Mr Chandrasekaran does not think that this dip can be viewed in correlation with the slowdown in the US.

IT companies generally do not have annuity-based contracts with domestic companies; hence they do not have an assured stream of revenue , say analysts.“In the Indian context, we have won some large engagements and we will be announcing a few more going forward. My focus will be to try and reduce the volatility in the longer term as India is a very important growth market for us,” said Mr Chandrasekaran.

More Stories on : Software | Consulting | Tata Consultancy Services Ltd

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