Flush with cash and stung by the rising value of the rupee against the US currency, Indian information technology companies are venturing into diverse geographies -- from Brazil to Ecuador. Along the way, they are diversifying their revenue streams, addressing niche segments, from finance and accounting to engineering, telecom, infrastructure and government, and deepening their presence in markets outside the US.
India's second largest software exporter, Infosys Technologies, is sitting on cash and equivalents worth Rs 6,442 crore (Rs 64.42 billion) -- up 87.5 per cent over the previous year. Its chief financial officer V Balakrishnan told Business Standard: "We are always on the lookout for strategic fits to enhance our global presence."
Wipro is looking at acquisitions in Germany and Canada to expand its footprint. The company is working on increasing its presence in these countries, including marketing and infrastructure. Wipro chief strategy officer Sudip Nandy said the acquisitions in Germany and Canada would provide an entry into those markets.
Nandy added that the company was looking for acquisition targets in telecom, BPO, infrastructure and package implementation. In the last quarter, Wipro won two contracts in Canada.
TCS has signed an outsourcing solutions agreement valued at over $140 million over a period of five years with Banco Pichincha, Ecuador's largest private bank.
Last week, Hyderabad-based Satyam Computer Services bagged four major deals in Singapore, Australia and the United Arab Emirates. The deals, worth a combined $70-75 million (a little over Rs 300 crore), covered the government and transport verticals.
"We see aerospace, high-tech telecom, automotive and industrial manufacturing as the fastest and dominant growing sectors. Besides, with task-based projects slowly transforming into programme-based projects, the deal sizes in this space are only getting bigger, at anywhere between $20 million and $40 million each," said TSK Murthy, head (integrated engineering solutions), Satyam.
A Booz-Nasscom (National Association of Software and Service Companies) study conducted in 2006 indicated that the global offshoring of engineering services would be a Rs $200 billion opportunity by 2020.
Still, this does not imply that the Indian IT companies are moving their business out of the US, which continues to account for 55-65 per cent of their revenues. "In fact, most of these deals were in the pipeline. They are simply being closed sooner than later," said an analyst.