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Moumita Bakshi Chatterjee
K Bharat Kumar

New Delhi/Chennai, May 3 In a difficult year that saw the global economy under severe stress, India’s top IT companies ended up pruning their overall travel expenses – some by as much as 13 per cent – during the second half of the fiscal ending March 2009.

The consolidated financial statements of Tata Consultancy Services (TCS), Infosys Technologies and Wipro Ltd show that business travel expenses fell in the second half of FY09 compared with the first half. The drop was most pronounced in the case of TCS whose travel costs came down by over 13 per cent in the second half. In the case of Infosys, the decline was nearly 10 per cent, although for Wipro, it was a marginal one per cent.

The IT industry had been facing a slowdown in the first six months of fiscal 2008-09 but its troubles were accentuated in the second half after the Lehman Brothers’ collapse in mid-September, followed by more bad news in the US’ financial services industry. This clouded clients’ IT budgets and new projects were put on hold starting October 2008.

Indian IT vendors have since focused on improving profitability by getting a better handle on their expenses. A source in one of the top five Indian IT firms said that companies see a chunk of their dollars spent on wages, telecom infrastructure and travel and transport. Top players have, so far, announced a freeze on wage hikes and promotions. “There is a tight correlation between telecom costs and travel and transport. Telecom costs have been historically slumping.”

Corporate cost-control drives have also been encouraging the use of videoconferencing facilities and technology solutions, to help reduce travel expenses.

“Infosys has reduced travel costs by 10-15 per cent and is making a conscious effort to use more of video conferencing and teleconferencing facilities,” the Infosys CFO, Mr V. Balakrishnan, told Business Line.

Mr Balakrishnan pointed out that the decline has been largely on non–billable travel expense. “Travel expenses are lower due to the global downturn, but part of it also due to our green initiative under which the company is stressing on reducing the carbon footprint,” he said.

Travel-related outgo for Infosys under various headings - software development and business process management, selling and marketing expenses, and general and administration expenses – worked out to Rs 372 crore in H2, against Rs 412 crore in H1.

TCS’ travel costs were pegged at Rs 330 crore, as opposed to Rs 382 crore in H1. For Wipro Ltd, the travel expenditure in H2 at Rs 457 crore was lower than Rs 461 crore in the first half of the fiscal.

More Stories on : Software | Performance | Infosys Technologies Ltd | Wipro Ltd | Tata Consultancy Services Ltd

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