TCS says Asia-Pacific growth recovering
Singapore: Tata Consultancy Services (TCS) said its deal pipeline for Asia-Pacific has improved in the past two months led by financial services and revenue could grow at a double-digit pace this year.
But the growth in its business in the region will still lag the 40 percent compound annual growth rate (CAGR) seen in the past five years before the current financial year, Girija Pande, the Asia-Pacific head of India's top IT services company by sales told a news agency in an interview on Monday.
"Pipelines are improving, we think green shoots are now getting leaves," Pande said.
"Will it come back and reach the 40 percent revenue growth that we have in the past? I doubt it will. 40 percent growth are is not Pande said the financial services firms are driving the deal pipeline for the Mumbai-based TCS, part of Tata Group that spans commodities, autos, and business services.
"Asian banks are not affected as badly as the western banks, they are buying the core banking services, while telecommunication companies are expanding," he added.
Most Asian banks have avoided the worst of the global financial crisis that hit banks in the United States and Europe badly. Many Asian banks are looking to expand outside their home markets to take advantage of an economic recovery.
Pande's comments came a few weeks after TCS beat forecasts with a 29 percent rise in its quarterly net profit helped by demand from recession hit financial customers, but warned that a sharp growth rebound in the near term was unlikely.
The company's financial year runs from April to March.
India's nearly USD 60 billion outsourcing sector is seeing some signs of revival in business prospects after getting badly hit by the global economic slowdown and financial sector turmoil that had forced clients to shut the tap on technology spending.
Pande reiterated that Tata Consultancy, which provides services such as consulting, system integration and manages call centres, is aiming to raise its headcount in China to 5,000 people in the next five years, up from more than 1,000 now.
Indian software services firms such as Tata Consultancy and second-ranked Infosys Technologies are expanding in Europe and elsewhere to cut their dependence on the U.S. market, which accounts for over half the sector's revenues.
They face competition from big global players such as IBM Inc, Hewlett-Packard, and Accenture that are looking for growth in Asia-Pacific and Latin America.
TCS shares traded 1.77 percent higher at 652.5 rupee (USD 14.04) as of, outperforming the largely flat Mumbai market.