Tata Consultancy Services, the $2 billion listed IT company from the Tata group is looking at expanding its global base by exploring untapped markets in Eastern Europe, Russia and China.
There are unexplored opportunities in Eastern Europe, Russia and China that the company must tap, be it in the form of potential markets or global delivery centres, according to TCS's annual report for 2004-05. TCS is India's largest software exporter.
"Growth avenues through inorganic means via mergers and acquisitions also have to be explored to complement our capabilities and plug gaps in portfolio of offering," it said, adding, the company must step up efforts to increase visibility across the globe through intense marketing and branding campaign.
At present it has 18 delivery centres outside India including the US, Hungary, Brazil, Uruguay and China, each of them certified at SEI-CMMi and PCMM Level 5. It has grown operations with special emphasis in Eastern Europe and North America.
TCS also aims to become a complete solutions company and provide higher solutions to its customers for which it is strengthening its domain-specific offerings and end-to-end solutions that would lead to higher value contracts.
TCS's global customers include seven of Fortune top 10 companies and the list of customers from $1 million to $25 million plus continued to grow in 2004-05, the report said.
The report said aiming to be a true global player, TCS plans to increase its non-Indian employees as the company expands globally.
TCS had over 40,000 employees at the end of 2004-05. It has 1,448 non-Indian employees representing 3.5 per cent of its workforce across international development centres and offices.
In 2004-05, it earned a consolidated revenue of Rs 9824.36 crore (Rs 98.24 billion) with America contributing about 59.2 per cent of the total revenues, UK, India, Continental Europe and Asia Pacific contributed 16.3 per cent, 12.2 per cent 6.8 per cent and four per cent respectively.
Challenges facing TCS
TCS sees currency fluctuations and adequate supply of skilled IT professionals as the main challenges in the coming times.
The company's revenues are largely denominated in foreign currency, predominantly in US dollar, British pound and euro.
Given the nature of the business, a large proportion of costs are denominated in Indian rupees. This exposes the company to profit/loss on currency fluctuations, the annual report of TCS for 2004-05 said.
Stating that it pursues a pro-active hedging policy, by the end of the last fiscal it had hedged a position in various currencies equivalent to $509 million, which comprised both forwards and option strategies.
TCS calculated net exposure for each currency using forex forward and options contract.
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