Indian IT majors are scripting a new story in China during the current fiscal, with Infosys Technologies leading from the front. The company reported profits of $5.89 million in the third quarter of 2009-10 fiscal as against losses of $1.98 million in the corresponding period of the last fiscal, thanks to increased outsourcing from multinational manufacturing firms and financial institutions in that country.
In a fascinating turnaround, Infosys has increased its profit margins in China, from a marginal $0.41 million in the first quarter and $1.1 million in the second to almost $6 million in the current quarter. Revenues from China during this quarter stood at $16.08 million.
Other two software behemoths, TCS and Wipro, are also taking long strides in China. TCS reported a compounded annual growth rate of over 30% in China revenues in the past half decade. Wipro did not comment on region-specific revenues, but said it aimed to grow China-based delivery to meet local and global market needs.
TCS had entered into Chinese market in 2002 and currently employs 1200 consultants—92% of them being locals— across four delivery centres. According to TCS chairman for Asia Pacific operations Girija Pande, China would be “strategic to our offshoring and outsourcing value proposition.
“Our strategy in China is a three-pronged approach to expand business: service the multinational clients which have expanded operations in China and need support; create China as sourcing regional base; and tap the Chinese domestic market,” Pande told FE.
With a growing profit base in China, Infosys is now upbeat about opportunities there. “We will be investing substantially in recruiting local people and building up our capacity. We believe that China has all the characteristics to become a comparable location to India in the long run,”
Infosys’ chief executive Kris Gopalakrishnan said recently. Infosys-China employs 1,619 professionals.
According to Wipro chief strategy officer KR Lakshminarayana, “The growth rate here is fueling fast-paced development and it’s important for a global organization to be present here.” Wipro aimed to grow the people strength in its new Chengdu centre to 1,000 and had hired 200 people there.
Said Gartner India senior research analyst Arup Roy, “China offers a benefit in terms of the global delivery model where offshore has become a hygiene factor. Indian companies having their presence in China enable them to compete with other global companies. With regard to skill type, specific skills like mainframe are available…
Source:http://www.financialexpress.com/news/Indian-IT-players-find-China-a-profitable-hub/576833/
