CSC announced today that it has signed a new information technology (IT) outsourcing agreement with global defense and security company, BAE Systems. The five-year contract replaces the existing agreement that was due to expire in April 2012. The estimated contract value is up to $160 million per year. The agreement was signed during the third quarter of CSC fiscal year 2012.

Under the new agreement, CSC will deliver a full range of IT services, including service desk, collaborative services, end user compute, mainframe, physical/virtual servers, storage and networking, service request fulfilment and project services and application maintenance and support.

“Signing this new agreement with CSC demonstrates the success of our long-standing business partnership,” said Dean McCumiskey, BAE Systems global chief information officer. “As the defense industry continues to evolve, CSC’s expertise and support in delivering highly competitive, value for money services across our business in support of our strategic and operational objectives will be invaluable.”

“We are pleased to have finalized this new contract and look forward to supporting BAE Systems’ dynamic, changing business,” said Andy Williams, president of CSC’s Northern European operations. “This fourth generation IT outsourcing agreement recognizes CSC’s ability for delivering an excellent service, providing cost efficiencies as well as innovative technology-enabled solutions to complex business challenges.”

CSC’s relationship with BAE Systems began in April 1994 when the companies signed a 10-year IT outsourcing contract in the UK. At the time, the contract was one of the largest commercial IT outsourcing contracts ever awarded to a single supplier in Europe. The relationship between CSC and BAE Systems has matured, strengthened and expanded, supporting BAE Systems multiple mergers and acquisitions in both the UK and home countries. Through this new agreement, CSC provides IT services in support of 11 BAE Systems businesses operating in over 100 locations in the UK, Saudi Arabia and Sweden.

Source:http://www.thestreet.com/story/11320692/1/csc-signs-new-five-year-it-outsourcing-contract-with-bae-systems.html

The rupee has fallen 14.3% this year, to be the worst performer in Asia. On the face of it, a falling rupee is likely to give a definite edge to exporters. But except for IT and diamond sectors, not everybody is so sure-footed .

IT to benefit from slide

For IT outsourcing industry, the recent currency movements are in its favour, said K Venkatesan, finance controller of Happiest Minds Technologies. He said that there is a positive impact on operating margins and bottom lines. Every percentage dollar gain results in around 30-40 basis points increase in operating margins.

The dollar converted rupee revenues also get a boost owing to the weakening of the rupee. Ganesh Murthy, CFO of Mphasis, feels that the rupee could hover around these levels till March. Suresh Singh, marketing head of Anthelio Business Technologies, said that the subdued capital inflows crisis and hike in crude prices, means that the rupee might weaken further and perhaps recover only in the next financial year.

FCCBs may hurt pharma

Pharma companies having most of their exports in dollar denomination stand to gain from the rupee depreciation. However, companies that have raised funds through foreign currency convertible bonds (FCCB) or taken any dollar-denominated debt may take a hit.

Nitin Parikh, chief financial officer, Zydus Cadila Healthcare , said, “The impact of a weak rupee depends on a pharma company’s position in terms of foreign exchange currency loans and forward booking among other factors. The slip in rupee will help large export orientation earnings. As far as the impact on domestic business goes, it will affect companies which import raw materials.”

Janmejay Vyas, chairman and MD, Dishman Pharmaceuticals & Chemicals, said, “The depreciation of rupee will have a two-sided impact on pharma companies like us, which have acquired foreign companies and are dealing with foreign currency. On the one hand, mark-to-market losses will increase , leading to pressure on margins, on the other hand, exports will be beneficial.”

Leather cos not smiling

An increase in dollar to rupee is good for leather exporters in the short-term , but over the long-term it is not impressive, said Rafeeque Ahmed, chairman , Council for Leather Exports . “We will lose margin on raw materials imports. Mostly, the industry hedges exchange rates on exports but they do not do that on imports, which could affect us,” he said.

Not much for apparel cos

Garment exporters see limited gains from the depreciation of the rupee as many have hedged their exposure at lower levels. “Most big exporters have taken forward covers at around Rs 48 levels and so there would not be any significant gains,” says Premal Udani, chairman, Apparel Exports Promotion Council (AEPC). “Poor demand , especially in Europe, has also added to their woes.”

However, exporters concede that the weak rupee has made their products a lot more cost competitive vis-a-vis rivals such Bangladesh and China. The sharp fall in the rupee would also help exporters with unhedged orders to make “good enough” profits.

Diamonds & gems makers look to capitalize

For the diamonds and gems industry , the falling rupee coincides with the peaking demand during the Christmas-New Year season. Diamantaires in Surat, the world’s biggest diamond cutting and polishing centre, are hoping to cash in on the weakening rupee. Diamond companies import rough diamonds, paying cash and the rupee depreciation helps the industry pay out lower on imports than what it earns through export.

“The dipping rupee helps the industry in all the merchandize and non-merchandize jewellery export as it hedges its risk against raw material well in advance,” said Rajiv Jain, chairman of Gems and Jewellery Export Promotion Council (GJEPC).

Source:http://economictimes.indiatimes.com/markets/analysis/it-to-benefit-from-rupees-slide-gems-shine-but-garment-makers-jittery/articleshow/10826194.cms