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Bharat Kumar

Chennai , Dec. 3

COMPANIES have been through tough times. But even as there is promise of recovery, it is becoming clear that the future won't mirror the good days of the past. Software companies now see the need for more manpower to earn what they earned with less, a year ago.

The attached table shows that both revenues and profits per employee have slumped for most companies. Only Satyam Computers and Mastek Ltd have shown an increase in revenues per employee.

Neither has reduced manpower, but each has more than proportionately increased revenues as it did manpower.

The others have shown significant slumps in revenues per employee.

Majors such as Infosys and Wipro Technologies have shown a decrease in excess of Rs 60,000, and a decrease of close to Rs 1.8 lakh per employee respectively. iGate Global exceeded biggie Infosys with a slump in revenues per employee of Rs 83,000.

It may be recalled that Wipro has been making acquisitions. This has led to more than doubling of its manpower strength in the last 12 months. Likewise, iGate Global Solutions, earlier Mascot Systems, which has made acquisitions, saw its manpower nearly doubled in the same time. Interestingly, these acquisitions are driving up manpower numbers but have not pushed up revenues proportionately.

Commenting on the figures, Mr Phaneesh Murthy, CEO, iGATE Global Solutions, said, "There were multiple acquisitions which were not yet fully integrated. Further, revenues did not go up because of which utilisation levels fell."

He added that most of iGate's acquisitions were strategic and had not been done for immediate revenue enhancement. According to him, the progress after the acquisitions is in line with the company's plans.

He also predicted that iGate's offering should lead to "revenue growth in the future that will beat industry growth."

Polaris Software Labs has shown a significant increase in both revenues per employee and net profit per employee. The former has shot up from Rs 2.73 lakh in September 2002 to Rs 3.64 lakh in Setpember 2003.

Polaris had acquired Citigroup's Orbitech in the last fiscal.

Significantly, Orbitech brought with it intellectual property rights in the form of software products that added to Polaris' software project offerings.

A spokesperson for the merged entity said, "Post-merger of Orbitech, effective November 1, 2002, Polaris was consolidating its manpower and was recruiting only on `just-in-time' basis, and hence, the first two quarters of this fiscal saw only a marginal increase in manpower.

The revenues per employee have been increasing only marginally from Rs 3.54 lakh to Rs 3.67 lakh in the last two quarters of the last fiscal and stood at Rs 3.60 and Rs 3.64 lakh in the next two quarters."

On the net profit front, the story is similar. Among companies that Business Line looked at, Mastek suffered the largest slump, followed by Wipro Technologies, whose figures of profit before tax and interest have been taken. iGate came next in order.

For Polaris, net profit per employee had figures of Rs 33,000 and Rs 50,000 in September 2002 and September 2003.

However, the Polaris spokesperson said that it witnessed a dip in net profit per employee in the last quarter of the last fiscal as there was an increase in staff costs in the post-merger scenario as staff compensation changed.

He added, "In the first quarter this year, due to the currency fluctuation, the net profit per employee dipped to Rs 39,000."

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