Tata Consultancy Services, Infosys and HCL Technologies have collectively created four times more jobs in the second quarter as compared to the first, a sign of the ever improving demand environment for software companies

The three companies have made net additions of 12,319 in the quarter ended September 30 as against 3,067 in April-June quarter, as per publicly available data. TCS leads the pack with net additions of 7,664 against 1,390 in Q1.

One of the main reasons, according to Dipen Shah, Head of Private Client Group Research, Kotak Securities, is that Q2 is when large-scale inductions of campus recruits begins. “Given that the demand patterns this time around are much brighter than what we saw last year, the increase in fresher inductions and lateral hirings is on expected lines,” added Shah.

In their Q2 earnings, TCS, Infosys and Wipro beat analyst expectations, a trend attributable to the improving economic climate, rising demand for software services and the depreciating rupee.

“The US market has come back, Europe has stabilised and velocity in decision making has improved in the last few quarters. Even discretionary spending has gone up and projects that were stuck in the pipeline have started moving,” said Shah.

According to recent news reports, 1.65 lakh new IT jobs could be created in India this year, bettering trade body Nasscom’s earlier projection of 1,50,000.

The emergence of new technologies such as cloud computing, mobility and big data too are driving demand for talent, especially freshers, says Sunil Goel, director of executive search firm GlobalHunt. Wipro is the only exception to this trend; its employee base has shrunk by 65 to 1,47,216 from 1,47,281 in the previous sequential quarter.

Ankita Somani, Sector Analyst with Angel Broking, believes that this could be because of Wipro’s employee utlisation levels (gross) which stood at 66.1 per cent.

“Wipro has enough people on its rolls already who have not been deployed on projects and hence it does not make sense to add more hands. Probably, the company will first step up utilization and then scout for new talent,” she said. Gross utilisation at TCS and Infosys stood at 78 per cent and 73 per cent, respectively, at Q2 end.

adith.charlie@thehindu.co.in

(This article was published on October 22, 2013)
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