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Vishwanath Kulkarni
Shamik Paul

Bangalore, May 1 Though the weak economy has led to a decline in new clients’ addition, Indian IT vendors have improved average earnings per client by selling a higher mix of services while strengthening focus on existing customers.

TCS, Infosys and Wipro have seen a steady increase in revenue per client in the last couple of years.

Revenue per client is a function of the total earnings of a company in a fiscal divided by the total number of active clients.

Infosys led its rivals in earning the highest average revenue from a customer. For fiscal 2009, Infosys earned $8.05 million a client, while new client additions dropped to 156 from 170 in the previous year.

TCS earned an average of $5.93 million a client, a marginal decline over previous year’s $6.06 million. The largest software exporter saw a decline in new client addition at 163 over the previous year’s 212.

Wipro Technologies, the global IT services arm of Wipro Ltd, raked in an average revenue of $5.01 million, up from $4.04 million in fiscal 2008. It added 110 new clients during fiscal 2009, down from 186 in the previous fiscal, the least among the top three vendors.

“Growth is coming from existing clients. It is a conscious strategy to sell more services to existing clients,” said Mr Sudin Apte, Head of Forrester Research in India.

“During these uncertain times, new client additions will be less. The volume of business from a new client is also small,” he added.

IT services vendors typically rely on their existing clients to drive their business. As a result, the repeat business for these vendors account for a major chunk of the revenues.

For TCS, the repeat business stood at 97.1 per cent for fiscal 2009, compared with 96.4 per cent in the previous year.

Infosys saw repeat business increase to 97.6 per cent (97 per cent). Wipro has seen a marginal decrease to 97.8 per cent (98 per cent).

Mr V. Balakrishnan, Chief Financial Officer, Infosys, attributed the increase in revenues per customer to the company’s ability to sell higher value services such as consulting and enterprise solutions.

“These solutions have high revenue productivity and as the proportion of such services increase, the average revenue per client will increase,” he added.

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