In the world’s biggest outsourcing market US, Cognizant Technology Solutions is now only $50 million behind Tata Consultancy Services, according to the October-December quarter revenues earned by these companies.

TCS, which counts General Electric and Citibank among its top US customers, earned $1.37 billion during the quarter ending December from the country, compared to Cognizant’s $1.32 billion.

From a gap of around $150 million in quarterly revenues from North America in March 2010, Cognizant is now looking set to become the biggest India-based outsourcing firm in the region.

On its part, TCS has a much more diversified client base when compared with Cognizant. For instance, while Cognizant gets almost 80% of its revenues from the US, TCS’s North American business contributes 53% of the total revenues. TCS has UK and Continental Europe customers contributing a quarter of its total revenues.

Cognizant, which counts JP Morgan, Merck and 3M among its top US customers, grew its revenues from the country sequentially by 6.1% and 31.2% compared to the December quarter of 2010.

TCS reported a 2.2% sequential growth in its America revenues and 20.2% compared to the same period last year.

Analysts tracking the sector said Cognizant is expected to narrow its gap with larger peers by growing its share of spend from top healthcare customers-a segment where others are not as strong.

“Its well-entrenched position in the healthcare segment (27% of revenue, which grew at 37% in FY11), where we see limited competition from tier-1 IT peers, and continued growth, motivated by regulation-driven spending, help the company,” Nomura Research analysts said in a note on Wednesday.

“Indian IT companies have grown 10-15% slower than Cognizant through good and bad times, and we do not see that changing anytime soon,” CLSA analyst Nimish Joshi said. Cognizant surpassed Infosys’ US revenue during March 2011 quarter.

Source:http://economictimes.indiatimes.com/tech/ites/cognizant-technology-is-just-50-million-behind-tcs-in-the-us/articleshow/11829314.cms

Mitsubishi Corp and India’s Tata Consultancy Services have established a joint venture in Tokyo that will provide information technology services to help Japanese companies expand overseas operations. Capitalised at 350 million yen, the new firm will develop and operate enterprise resource planning systems and offer cloud computing services.

In this joint venture, Mitsubishi has taken a 40% stake, while the remaining 60% will be held by TCS’ Japanese unit.

The new company will employ several hundred specialists in Japan while outsourcing software development to engineers and others at TCS bases in India to hold down costs. It will provide maintenance and other services through TCS locations in 42 countries and regions.

TCS rang up sales of $8.2 billion for the year ended March 2011, and now stands at ninth position worldwide in the information technology services segment.

The firm’s Japanese unit, formed in 2004, has been catering primarily to foreign companies. By partnering with Mitsubishi, which boasts a vast customer base, TCS plans to develop new clients in Japan.

Japanese companies are increasingly directing their IT investments abroad, especially as domestic demand shrinks and the yen stays strong.

TCS’ stock, on Tuesday, ended at Rs1,199.45, up 0.63 % on the BSE.

Source:http://www.yourmoneysite.com/news/2012/feb/tcs-mitsubishi-corp-form-joint-venture-worth-350-mn-yen.html

Infosys, whose bellwether tag for India’s software industry is questioned by faster growing rivals, had better cash flow and receivables than rivals HCL Technologies and Tata Consultancy Services over the past nine months. At a time when outsourcing customers are delaying decisions and asking for longer credit, investors and experts are beginning to get concerned about a worsening receivables position at TCS and HCL – known more for outpacing Infosys in growing their revenues.

During the nine-month period from April to December, Infosys’ operating cash flow was almost 80% of revenue, compared to less than 50% each for TCS, HCL and Wipro. The days sales outstanding (DSO), which is defined as a ratio of account receivables and total revenue, is another metric where India’s second-biggest software exporter scores over domestic rivals. During the third quarter ending December, Infosys’ DSO or debtor days was 62 days compared with Wipro’s over 90 and TCS’ 84 days. Overall, Infosys is able to collect monies due from customers faster than rivals, which helps it maintain a healthy cash flow.

“If you look at the last two downturns in the business – one in 2001 and another in 2008 – in both the times, we have come out as winners only because of our focus on quality of profits and the financial discipline we have exhibited. We are very particular about not getting into commoditized businesses and make sure we focus on high quality growth,” said V Balakrishnan, chief financial officer of Infosys. He denied that this drive for profit and better cash flow is coming at the expense of growth.

“I don’t think, this is hurting our growth. There is no short cut to being a quality player in the industry.” Analysts say the past nine months reflect worsening receivables position among tier 1 Indian tech firms, barring Infosys. “Infosys has shown the best profit conversion to operating and free cash flow among Tier-1 techs while others have lagged, although the Dec 11 quarter saw some reversal at TCS and Wipro,” CLSA analysts Nimish Joshi and Arati Mishra said.

But in an industry with aggressive rivals like TCS and Cognizant on one hand, and globally entrenched firms such as IBM and Accenture on the other, Infosys will need more than its cash discipline to gain market share. “Infosys’ focus on not bidding aggressively for the commoditised work has helped offshore pricing but has come at the cost of volume growth.

Source:http://economictimes.indiatimes.com/tech/software/bellwether-or-not-infosys-beats-tcs-hcl-wipro-in-cash-flow/articleshow/11646735.cms

Tata Consultancy Services Ltd. announced that it had been designated as a Leader in Application Outsourcing or AO in capital markets by the prominent advisor on the next generation of global services Everest Group in its reports – Application Outsourcing (AO) in Capital Markets – PEAK into the Evolving Service Provider Landscape.

Among the attributes that earned TCS the prominent position are its strong customer base, partnerships with capital markets technology vendors, its extensive portfolio of proprietary solutions for capital markets AO delivery and the capital markets related modules of TCS BaNCS, it said.

The report is part of the Everest Group’s nine-part series on AO in BFSI (banking, financial services and insurance industry) in 2011. In this research, Everest Group analyzed the capabilities of over twenty of the most important players in the AO industry in global capital markets. The providers were examined through the lens of Everest Group’s PEAK (Performance, Experience, Ability, Knowledge) Matrix – a composite index of distinct metrics focused on provider’s capability and market success.

At the BSE, Tata Consultancy Services closed Wednesday’s trading at Rs.1,096.75, up by 0.84 percent from the previous close.

Source:http://www.nasdaq.com/article/everest-group-ranks-tcs-as-leader-in-application-outsourcing-in-capital-markets-20120125-00135

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The country’s top outsourcing firm Tata Consultancy Services (TCS) is expected to provide jobs to at least 25,000 people through their various projects as the Madhya Pradesh government cleared the decks for TCS to set up the Special Economic Zone (SEZ) in Indore.

Moreover, TCS is likely to provide job to over 10,000 local engineers as far the conditions set by the state government for providing land at subsidised rates to the IT giant.

According to TCS officials, the major projects would be operational by 2013 and will employ more than 25,000 people directly and equal number indirectly.

The TCS hubs in Indore will also provide businesses to hundreds of ancillary units. State cabinet had cleared the proposals to offer 100 acres of land to IT major TCS at the rate of Rs 20 lakh per acre.

Source:http://news.oneindia.in/2012/01/25/good-news-techies-tcs-to-offer-25000-jobs-in-indore.html

Tata Consultancy Services (TCS), (bse:532540)(nse:TCS) a leading IT services, consulting and business solutions organization, announced today that it has been designated as a Leader in Application Outsourcing (AO) in capital markets by the prominent advisor on the next generation of global services, Everest Group in its report, Application Outsourcing (AO) in Capital Markets – PEAK into the Evolving Service Provider Landscape. Among the attributes that earned TCS the prominent position are its strong customer base, partnerships with capital markets technology vendors, its extensive portfolio of proprietary solutions for capital markets AO delivery and the capital markets related modules of TCS BaNCS.

The report is part of the Everest Group’s nine-part series on AO in BFSI (banking, financial services and insurance industry) in 2011. In this research, Everest Group analyzed the capabilities of over twenty of the most important players in the AO industry in global capital markets. The providers were examined through the lens of Everest Group’s PEAK (Performance, Experience, Ability, Knowledge) Matrix – a composite index of distinct metrics focused on provider’s capability and market success.

“TCS is the largest among major offshore AO providers examined in our research and a true industry leader with a strong focus on BFSI and an impressive product portfolio as well as robust technology vendor partnerships,” said Amneet Singh, Vice President, Everest Group. “We are pleased to award TCS this distinction.”

“We are honored to receive the designation of a Leader in AO in Capital Markets by Everest Group – an organization whose research and analysis in the global services industry has and will continue to inform and guide business leaders around the world,” said Susheel Vasudevan, Vice President & Head of Banking & Financial Services (UK, Europe, Global Capital Markets) for TCS. “As companies globally streamline their processes by leveraging application management and IT investments, TCS will remain dedicated to providing our customers with the products and solutions that help to meet their goals.”

Source:http://www.marketwatch.com/story/tcs-ranked-as-a-leader-in-application-outsourcing-in-capital-markets-by-everest-group-research-2012-01-24

R K Global has maintained hold rating on Tata Consultancy Services (TCS) with a target price of Rs 1206 in its January 19, 2012 research report.

“Tata Consultancy Services (TCS) reported a standalone, ~38% YoY rise in revenues (better than our expected ~6% YoY rise) at Rs 1,05,440 (USD2,067 mn) mn in Q3FY’12, while its PAT stood at Rs 31,713 mn (~36% from our expected Rs 23,266 mn), helped by continued demand for outsourcing services and INR gain over the period. The company has guided for a far better Q4FY’12E stating that some of the discretionary projects which the company expected to get closed in Q3FY’12 did not close, so tranches of payment and renewing of deals are strongly on the cards.”

“The top-line was in-line with expectation, but margin expansion was slightly ahead of what we have factored. Moreover, there was a huge rise in the other income (~205% rise v/s our expectation) portion that inflated the PBIDTA by ~8%. Overall, it was very positive in terms of operational performance. But the key positive which came out of the result is in a seasonally weak quarter they have signed 40 new clients, including 10 transformational deals. Also, their onsite volume went up ~4.5%+ QoQ, which indicates that the second half is going to be better than what consensus might be factoring in at this point of time. Moreover, utilization levels for the Q stood at ~82% (with attrition rate at ~11.7%) renewing confidence that deals execution and contracts servicing performances are pretty strong.”

“The company’s core EBIDTA grew by ~39% for the period, while margins touched ~31%, close to margin leader Infosys. Its PBIDTA (margin at ~38%) grew a whopping ~62% over higher other income and INR dep. TCS’s PAT for Q3FY’12 stood at a YoY growth of ~36%, while PATM stood at ~30% over lower depreciation. On-site volume growth on new client addition is expected to prove productive for the stock in due time. Presently, the stock trades at a P/E & P/BVPS of ~17.9x and ~6.9x respectively. We re-iterate our earlier rating of HOLD, re-affirming on our earlier target price of Rs 1206 (with a potential upside of ~10.7%), as we believe that one more Q with similar performance is needed to revalue the stock. The TP is factored over a P/E & P/BVPS,” says R K Global research report.

Source:http://www.moneycontrol.com/news/recommendations/hold-tcs-target-rs-1206-r-k-global_655562.html

Tata Consultancy Services reported 23% year-on-year rise in second quarter consolidated net profit at Rs 2,887 crore, helped by continued demand for outsourcing services and said the deal pipeline remains strong.
Revenue for October-December quarter jumped 37% from a year ago to Rs 13,204 crore, India’s top software services exporter said on Tuesday
Analysts on average had expected TCS net profit at Rs 2,893 crore on revenue of Rs 13,230 crore, according to CNBC-TV18 poll.
“While technology budgets are still being set for the next fiscal (year), there is little doubt that technology is a key resource to help global businesses optimise their operations and fuel growth in the current economic climate,” said N Chandrasekaran, CEO and MD.
TCS’ operating margin in the third quarter was up 218 basis points at 29.2%.
“We continue to focus on managing our operations optimally in the face of increased external volatility. We have increased operating margins significantly by taking the benefits of growth, exchange movements and by keeping a strong focus on cost management,” said S Mahalingam, CFO.
While the rupee depreciation aided margin expansion, net earnings were hurt due to foreign exchange losses.
TCS said it had a forex loss of Rs 300.81 crore in the third quarter, versus a gain of Rs 52.16 crore in the year ago quarter.
“The level of currency and market volatility has only risen in the past three months and we are adapting our strategies accordingly,” said CFO S Mahalingam.
The global economic uncertainties led by the euro zone debt crisis is a major worry for Indian software service providers. TCS, however, said it saw growth across regions, with Europe “leading the growth story among mature markets.”
The company said Europe business grew 18.1%, followed by US at 13.3% and UK grew by 9.5%, in the third quarter. Latin America revenue grew 18.6%, APAC (Asia-Pacific) region saw a 15.7% growth, while revenues from India, were up 14.8%, it said.
“All industry sectors have shown strong growth with all sectors growing at more than double digits except telecom,” TCS said.

TCS added 40 new clients in the third quarter and signed 10 large deals during the quarter. The number of USD 100 million clients rose to 14 from 12, it said.
TCS net added 11,981 employees in Oct-Dec and had 226,751 employees as of Dec 31. It plans to add 15,000 employees in the current quarter.
The company said attrition rate dropped to 12.8% in the quarter. Attrition in IT services business was at 11.7%, while BPO (business process outsourcing) attrition was at 22.6%, it said.
TCS shares closed down 0.5% at Rs 1,103.95 on NSE before the results announcement.

Source:http://www.moneycontrol.com/news/results/tcs-q3-cons-net23-yoyoutsourcing-demand_652603.html

Some outsourcing customers are asking software companies to bid for low-end back-office and application development projects through reverse auctions, adding to the competitive pressures for large companies like Tata Consultancy Services and Infosys.

For established outsourcing clients such as General Electric, as well as small- to -mid-sized firsttime outsourcers in the US, Europe and the Middle-East, reverse auctions are bringing down billing rates by up to 40% in some instances and 10-15% on average.

Unlike an ordinary auction where buyers compete to procure goods or services, in a reverse auction, sellers of outsourcing services are asked to compete with each other for a portion of a software or contact centre project.

As this auction using specialised software progresses, outsourcing firms try and outbid each other real time over the Internet, bringing down the rates rapidly during the process.

For example, instead of issuing a request for proposal, appointing an outsourcing consultant, and then going through various rounds of selecting an outsourcing vendor, clients ask tech firms to bid real time on the Internet. This helps them save on both time and procurement costs.

“Thank God, this is not a mainstream trend, and does not look like it will ever get there,” said a sales executive at one of the toptier Indian technology firms.

Reverse auction in IT sector still a niche trend

He requested anonymity because he did not want to upset his customers. For now, reverse auctions are not going to affect profit margins of tier-1 Indian tech firms because it’s still a niche trend and currency fluctuations will absorb most of the pricing pressures in the coming year.

“We saw some shades of this trend after the 2008 Lehman crisis, when banks and customers like GE put out a quarter of their budget for bidding through reverse auctions,” he added. Phil Fersht, founder CEO of sourcing advisory firm HfS Research, said nearly 75% of projects with a total contract value of over $5 million have some element of reverse auctioning between outsourcing vendors.

“This is very much commonplace today as buyers become experienced at procuring IT labour for project work. I can see it only increasing in the next few years as long as there continue to be so many suppliers,” he said. Partha Iyengar, vice-president and regional research director India at Gartner, said this trend is gaining visibility because of the economic slowdown.

“This is replicating retailing in the sourcing world. I would ask customers to be very careful while doing it this way.” He added that applying reverse auction to outsourcing could be dangerous for customers as they tend to be less rigorous while selecting vendors through this mode.

“Also, many consultants are trying to pitch this as a differentiated tool that could bring prices down magically,” Iyengar said. While carving out the commoditised portions of projects for reverse auctions is not good for large IT services providers, the mid-sized ones are not complaining.

Reverse auctions give vendors like Mindtree UST Global, Hexaware and others an opportunity to bid for projects from large outsourcing customers who have traditionally worked with tier-1 Indian companies like TCS and Infosys.

“Some customers are beginning to ask if it makes sense to bring IBM, Infosys and the like for commoditised projects with the overhead of managing tier-1 vendors,” Iyengar said. Not all software services firms are keen to enter a dogfight for projects put under reverse auctions.

“As a matter of principle, we have walked away from three such projects in past six months. One of the customers, a bank in the US, continues to work with us on other contracts,” said a senior executive at one of the top three Indian tech firms. Iyengar said as more low-end projects are automated and standardised, reverse auctions will only gain traction.

“For smaller companies that cannot afford high sales and marketing costs, this becomes a no-brainer.” Companies like Infosys are staying away from such bids as they prefer not to compromise on margins. And mid-sized rivals are more than happy to fill in.
“We are already seeing top-tier providers staying away from some of these low-cost bake-offs and the client choosing from second-tier providers,” Fersht of HfS Research said. For India’s over $70-billion IT industry, which is trying to cope with economic uncertainty in the top markets of the US and Europe, trends like reverse auctions threaten profit margins.

“If the outsourcing industry gets caught in a cycle where the lowest common denominator wins (i.e. the cheapest wage rates per hour), margins will decrease, quality of personnel will diminish and valuations will get hit,” said Fersht.

Source:http://economictimes.indiatimes.com/tech/ites/clients-ask-it-firms-like-infosys-tcs-to-bid-for-low-end-projects-through-reverse-auctions/articleshow/11429049.cms

For the first time in many years, the number of short-term US visas given to Indian professionals has declined, giving credence to complaints that America is making it difficult for software companies such as Infosys and Tata Consultancy Services to send employees to their biggest market.

Approvals for L-1 visas, on which Indian software companies rely to send their most skilled professionals on assignments to the United States, were 28% lower at 25,898 in 2011, data from an independent public policy think tank based in the US show. On the other hand, such visa approvals rose by 15% for applicants from the rest of the world, leading to concerns that India is singled out for attention.

“This shows an enormous gap in visas issued as well as approval/denial rates between posts in India and the rest of the world, raising policy questions as to whether this great disparity is the result of a conscious policy at US posts in India,” the National Foundation for American Policy wrote in its report.

Among the advisory members of the foundation is Columbia University economist Jagdish N Bhagwati, an advocate of global free trade. Most people in the software industry believe there is a deliberate policy of discrimination against Indians but they are wary of voicing their opinion publicly for fear of antagonising the American government.

Som Mittal, the president of software industry lobby Nasscom, said even American companies such as IBM and Accenture have been affected because the high rejection rates prevent many of their Indiabased staff from travelling to the United States.

“For us, it adds to our uncertainty and costs,” he observed.

40% of Work Permits Under L1

About 25,000-35,000 Indians travel to the US every year to work on assignments for software companies. Up to 40% of work permits are usually under the L1 category meant for professionals with specialised skills such as project management.

India’s $70-billion IT services sector is facing increased scrutiny from US immigration officials and other federal authorities, especially after an American employee of Infosys accused the company of abusing short-term work permits issued under B1 visa category to do software code writing.

The US has also doubled visa fees under the H1 and L1 categories that most Indian companies use. The Indian government has been urging the US, which accounts for more than half of Indian IT exports, to ease up on visa rejections but it does not appear to be making much headway.

“The release of the L1 visa data makes it difficult for US government officials to argue that nothing different is going on in India,” the foundation wrote. The US State Department has been denying that anything is amiss with L1 visa approvals in India because the country gets the lion’s share of such work permits. However, the foundation termed that line of argument “questionable”.

“The fact that India has a large and growing pool of skilled professionals tells us nothing about whether when employers apply for L1 visas, the individual cases of such professionals are decided properly.” Already facing an uncertain economic environment, companies such as TCS, Infosys and Wipro are now being forced to adopt technologies such as telepresence to compensate for the presence of an expert at the customer’s site.

Source:http://economictimes.indiatimes.com/news/nri/visa-and-immigration/it-companies-feel-the-pinch-as-us-holds-back-l-1-visas/articleshow/11344541.cms

Billionaire Mukesh Ambani-led Reliance Industries lost its position of the country’s most valued company to the IT giant TCS, part of the salt-to-software conglomerate Tata group.

As the share price of Reliance Industries Ltd (RIL) fell by 2.81 per cent to a multi-year low of Rs 692.90 today, the company’s market valuation slipped to Rs 2,26,886 crore — a shade below Tata Consultancy Services’ Rs 2,27,282 crore.

Consequently, RIL lost its long-held position (except for a brief period in August this year) of the country’s largest company in terms of market valuation.

In comparison to RIL’s performance, TCS shares ended with a modest loss of 0.35 per cent at Rs 1161.25 and were earlier seen trading with a modest gain for most part of the trading session — incidentally the last for 2011.

The performance of TCS stock was also a shade better than the barometer index Sensex, which fell by 0.57 per cent.

Earlier this month, RIL had also lost its position of the most influential stock in the Indian market to another IT giant Infosys.

RIL had been briefly dethroned from its position of the country’s most valued company twice in August — first to Coal India Ltd and then to another state-run firm ONGC.

RIL’s market value slipped below that of TCS for the first time at around 2 pm this afternoon and the country’s biggest software exporter managed to retain the lead at the end of the trading session.

RIL has been among the best stocks to own in India for many years, but it continued to under-perform the overall market for most part of 2011, which has as such turned out to be a bad year for the stocks.

Source:http://articles.timesofindia.indiatimes.com/2011-12-30/software-services/30572363_1_influential-stock-ril-tcs-shares

The TCS Nagpur Campus will be built in two phases with Phase 1 containing 8,200 seats for IT services and BPO services.
Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions firm, announced that it will expand its operations in the state of Maharashtra by building a new software development campus in Nagpur with an investment of Rs. 6bn in the first phase.

The TCS Nagpur Campus will be located on a 54-acre property in the Mihan SEZ on the city’s outskirts. The Hon’ble Chief Minister of Maharashtra, Shrl Prithviraj Chavan was present to preside over this occasion and laid the foundation stone for Phase 1 at a ceremony held at the site of the campus today. He was Joined by other dignitaries from the city.

Once the two phases are completed, the state-of-the-art TCS Campus will house 16,000 associates in the facility built with a strong environment-friendly design. Apart from world-class offices, the TCS Campus will have customer collaboration centers, cafeterias, gymnasiums and outdoor sports facilities to offer a holistic environment to knowledge professionals.

Mr. N. Chandrasekaran, Chief Executive Officer and Managing Director said; “Nagpur has the potential to become the next big hub for knowledge-based industries like IT and engineering with Its strong eco-system of universities, talented people and infrastructure. After Mumbai and Pune where we employ over 40,000 people, we are delighted to be part the IT revolution in Nagpur. Our growing presence in Maharashtra continues to be of strategic importance for our overall business growth and we remain committed to working in close collaboration with the all stakeholders in the state to help development of local talent and provide our customers with the world-class IT solutions from this location.”

Mr Chandrasekaran added: “On behalf of TCS, I would like to thank the Hon’ble Chief Minister of Maharashtra for making time for this auspicious function. We would not have been able to commence this project without the help of the Maharashtra government officials including MADC officials in Nagpur whose energy and commitment to this project has helped make it a reality.”

The TCS Nagpur Campus will be built in two phases with Phase 1 containing 8,200 seats for IT services and BPO services. Phase 2 will be of a similar size. Built with locally sourced materials and with an eye on sustainabillty, the campus will encompass water conservation and energy saving features and will be a zero-discharge facility.

Source:http://www.indiainfoline.com/Markets/News/TCS-to-set-up-large-software-development-campus-in-Nagpur/5315097326

India’s biggest software services firm Tata Consultancy Services is not pursuing the acquisition of Lufthansa’s IT arm actively anymore on concerns of profitability and hassles of reaching an agreement with the airline’s labour union, at least three people familiar with the discussions said.

European companies such as Lufthansa, who already outsource their IT services work to vendors including TCS and NIIT Technologies, are under pressure to shed non-core assets. For Indian tech firms seeking to grow their business beyond the top market US, such transactions promise to bring sustained revenues with local staff.

However, European labour laws, aimed at protecting local jobs, make it tough to relocate existing projects to cheaper delivery locations such as India. “It’s a marriage mostly seen as win-lose here in Europe, especially with the danger of most work getting shipped offshore,” said a senior official at one of the Indian tech services firms based in Europe. His company was among bidders looking to acquire a stake in Lufthansa Systems.

Another person also based in Europe and familiar with early talks between TCS and Lufthansa said the two companies could still rework a transaction based on renewed structure. “Instead of a complete buyout, a joint venture with TCS can be among possibilities,” he added. Lufthansa Systems, the IT arm of Europe’s second biggest airline had 2010 revenues of 4,105 core (almost $780 million) with some 3000 staff and counts its parent apart from several other airline companies among top customers. In August this year, Lufthansa had confirmed reports of restructuring its IT unit including plans to seek a partner.

“I have heard rumours about talks between Lufthansa and TCS. Of course we will take care of our colleagues and no one will be left alone. We are always concerned about job losses in acquisitions as this is usually passed off as synergy effect but these people are highly trained and skilled individuals and any job loss is absolutely unacceptable,” said Arne von Spreckelsen, a spokesperson for the Lufthansa trade union with some 2.2 million members.

When contacted by ET, a TCS spokesman said his company does not comment on market speculation. Lufthansa Systems officials had not responded to an email query sent by ET on Monday. TCS was not the only bidder in race to acquire Lufthansa Systems; rival Wipro, apart from several European outsourcing firms have had dialogues with the airline over past two years. A successful acquirer will get the expertise to target nearly $10 billion global airline IT market. Experts say labor troubles would continue to derail any large acquisition bids by Indian tech firms in Europe.

“European labor issues are a structural impediment to acquisitions of larger firms by offshore firms which is precisely why none have happened so far,” said Peter Schumacher, Chief executive of European think-tank Value Leadership. “These issues cut across Europe, as the recent strike by more than 400 Danish employees of CSC shows,” Schumacher added.

Under pressure to shed non core business assets, European outsourcing customers such as Lufthansa are also being asked by the labor union to raise wages. “We have asked Lufthansa group companies for a 6.1% compensation hike for their employees, this includes Lufthansa Systems. We will start negotiations on January 13th and we are confident that we can arrive at a conclusion on good terms as what we are asking for is fair,” Mr. Spreckelsen said.

Over the past three years, tech firms including Wipro, Infosys, Patni and several others have had discussions with potential targets such as Globant of Argentina, Ciber in the US and IDS Scheer of Germany. While Software AG acquired IDS Scheer earlier this year, both Globant and Ciber decided to discontinue their dialogues with potential acquirers. In 2008, Infosys made a $753-million offer for UK-based SAP aggregator Axon. However, it backed out when domestic rival HCL made a competing bid, bettering Infosys’ original 600-pence offer, and finally completed the acquisition.

Source:http://economictimes.indiatimes.com/tech/software/tata-consultancy-services-not-keen-on-lufthansa-systems-buy-on-profit-concerns/articleshow/11262626.cms

IT bellwethers Infosys and TCS and mid-tier companies such as MindTree and Hexaware are likely to beat street forecasts, in spite of the uncertain macro-economic environment. Analysts at Kotak Institutional Equities research said offshore IT companies can beat the Street’s low double-digit growth forecasts.

“The macro environment remains uncertain and challenging. Memories of a couple of bad revenue growth quarters for Indian IT services firms after the Lehman crisis are still fresh,” the Kotak analysts said, adding that there was less possibility of seeing such a sharp slowdown in revenue growth.

Few IT industry leaders have previously said that banking, financial services and insurance (BFSI) verticals would slow down or be flat in the next quarter due to the ongoing crisis in the euro zone. BFSI contributes about 20 to 30 per cent of revenue for many of the top IT companies.

The report said there was no such strong correlation linking the global macro slowdown to companies’ IT spends and IT outsourcing. The report said IT offshoring growth story is about gaining market share within existing IT spends. It does not depend much on growth in overall IT spend.

The report cited several instances where IT companies have performed beyond market’s expectations. It said the form 8-K filing by Cognizant with the Security Exchange Commission of the US, mentioned about setting up the 100 per cent variable company’s target for senior management at ‘at least 23 per cent’ of dollar revenue growth for 2012 estimated.

“We believe Cognizant would have built in ample cushion to account for potential macro-driven pricing pressure as well as adverse cross-currency movements. Volume growth assumption built into the 8-K revenue targets is likely higher. We also note that Cognizant refrained from setting current year 2009 performance targets for the management in current year 2008 – clearly suggesting that the clichéd ‘this time is different’ may be true as far as comparing the current scenario to the post-Lehman one is concerned”, read the report.

Another instance, which it mentioned, was about strong November 2011 earnings report from Accenture. “Revenue momentum sustained, bookings were strong (outsourcing bookings were up 40 per cent YoY), the company reiterated its year-ending Aug 2012 revenue guidance, and hiring numbers were robust”, read the report.

Source:http://www.mydigitalfc.com/news/infy-tcs-likely-beat-forecasts-649

Tata Consultancy Services plans to invest Rs 600 crore in phase one to set up a software development campus in Nagpur, Maharashtra.

The campus will be built in two phases, and the software outsourcing services provider plans to employ 8,200 people for IT and BPO services in the first phase. Phase two of the development will be of a similar size, TCS said on Monday.

TCS’ Nagpur campus will be located on a 54 acre property in MIHAN SEZ [Multi-modal International Cargo hub and airport] on the outskirts of the city, it said.
TCS shares were down 1.6% at Rs 1,128.50 on NSE in morning trade.

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Source:http://www.moneycontrol.com/news/business/tcs-to-setsoftware-development-centrenagpur_635572.html

Tata Consultancy Services (TCS) announced that it has been designated as a Leader in the Life Science R&D IT Outsourcing Market by the prominent global market intelligence firm IDC Health Insights in its report, IDC MarketScape: Worldwide Life Science R&D IT Outsourcing 2011 Vendor Assessment. Among the attributes that garnered TCS the honor are the company’s more than twenty-year history of experience in the life sciences field, its broad portfolio of industry-specific services and its ability to effectively meet increasing customer demands for resources across the entire life science value chain.

IDC Marketscape reports are designed to identify factors for effectiveness and success in particular markets, both long term and short term, and then evaluate vendors in the market against those factors. The key criteria for defining excellence in the study focused on a number of factors including project experience in the life sciences R&D outsourcing market, strength of project leaders and their teams, breadth of service offerings and quality of work and customer satisfaction.

“Providing services to life science companies of all types and sizes, TCS has a well-balanced portfolio of IT and BPO service offerings,” said IDC Health Insights Research Director, Dr. Alan Louie. “TCS is among the most experienced vendors in the R&D IT outsourcing space, with strong experience in all of the services the company provides, significant industry-specific knowledge, competitive pricing, and the ability to easily meet increasing customer demand for resources. With its significant expertise, accumulating life science IP assets, and strong investment in growth, TCS should continue to be a dominant player in the life science R&D space for years to come,” he added.

TCS has collaborated with the world’s leading life science and healthcare organizations for over two decades in diverse geographies and has leveraged this experience to enable customers to address current challenges and meet future business requirements with efficient, cost-effective solutions.

“We are honored to receive the designation of Leader in the Life Science R&D Outsourcing IT market from IDC Health Insights – an organization that itself is recognized as a true leader and premier global market intelligence firm,” said Debashis Ghosh, President, Life Sciences, Manufacturing, Energy & Resources, TCS. “As the life science market continues to evolve at an increasingly rapid pace, TCS will remain ahead of the curve and is committed to providing its customers with the capabilities and support they have come to expect from us to remain successful.”

Source:http://rfpconnect.com/news/2011/12/9/tcs-ranked-as-leader-in-the-life-science-r-d-it-outsourcing-market-by-leading-analyst-firm

Tata Consultancy Services (TCS), a leading IT services, consulting and business solutions organization, announced today that it has been designated as a leader in the Life Science R&D IT Outsourcing Market by the prominent global market intelligence firm IDC Health Insights in its report, IDC MarketScape: Worldwide Life Science R&D IT Outsourcing 2011 Vendor Assessment. Among the attributes that garnered TCS the honor are the company’s more than twenty year history of experience in the life science field, its broad portfolio of industry-specific services and TCS’ ability to effectively meet increasing customer demands for resources across the entire life science value chain.
IDC Marketscape reports are designed to identify factors for effectiveness and success in particular markets, both long term and short term, and then evaluate vendors in the market against those factors. The key criteria for defining excellence in the study focused on a number of factors including project experience in the life sciences R&D outsourcing market, strength of project leaders and their teams, breadth of service offerings and quality of work and customer satisfaction.
TCS has collaborated with the world’s leading life science and healthcare organizations for over two decades in diverse geographies and has leveraged this experience to enable customers to address current challenges and meet future business requirements with efficient, cost-effective solutions.

Source:http://www.indiainfoline.com/Markets/News/TCS-ranked-as-leader-in-Life-Science-RandD-IT-Outsourcing-Market-by-leading-Analyst-Firm/4064625719

Tata Consultancy Services (TCS), (bse:532540)(nse:TCS) a leading consulting, business solutions and IT services organization, today announced that Everest Group, an advisory and research firm on global services, has recognized TCS as a Leader in insurance domain knowledge and in the insurance applications outsourcing market in its November, 2011 report.

The Everest Group evaluated leading global IT vendors servicing large (>US$25 million), multi-year (>3 years) applications outsourcing engagements specific to the insurance sector in terms of delivery capability and market success. The evaluation was based on the five key dimensions of the group’s proprietary PEAK Matrix: market success, scale, scope, domain investments and delivery footprint. On an aggregate basis, TCS received the highest rating out of all the service providers in the analysis of delivery capability and the second highest rating in the analysis of market success (based on transaction activity).

“This report reaffirms our position as a global leader and innovator in providing domain led services to the insurance industry,” said Suresh Muthuswami, President of Insurance and Healthcare, TCS. “Our best-in-class application development, process optimization, legacy modernization, digital strategy and analytics offerings combined with our insurance industry expertise enables our clients to transform their business and enhance their customer centricity.”

“Extensive scale backed by significant domain investments has enabled TCS to win several large deals in the insurance AO space. With momentum across all the sub-verticals of the insurance industry, TCS has established itself as a market leader in this space,” said Amneet Singh, Vice President, Global Sourcing, Everest Group.

Source:http://www.marketwatch.com/story/everest-group-positions-tcs-as-a-leader-in-insurance-applications-outsourcing-2011-11-14

Angel Broking has maintained `Accumulate` on Tata Consultancy Services (TCS) with a price target of Rs 1,220 in its report dated Nov. 11, 2011. The broking house gave the following rationale:

Diligenta, the business process outsourcing (BPO) provider in the UK and a subsidiary of TCS, announced that it will assume administration responsibility for 3.2mn policies for Friends Life, a provider of pensions, investments and insurance. The agreement, effective from March 1, 2012, is worth USD 2.2 billion (GBP 1.37 billion) over 15 years. This major business win will increase the total number of policies administered by Diligenta to just under 8mn. Outsourcing much of its customer service and IT functions for its UK heritage business will allow Friends Life to focus on its new proposition developments, including its new corporate platform, in its core markets of corporate benefits, protection and retirement income.

Diligenta will assume administration responsibility for much of Friends Life`s closed book protection business and a significant part of its corporate benefits business. Diligenta and TCS will deliver IT infrastructure and IT services with some policies migrating to TCS BaNCS Insurance, a globally recognized industry-leading insurance platform. As a result of this new arrangement, a total of approximately 1,900 Friends Life roles across a number of office locations in the UK will transfer under their existing terms of employment to Diligenta. All those who will transfer would continue to service Friends Life`s customers, ensuring both continuity of service delivery and expertise. This is the second biggest order ever signed by TCS. We continue to maintain our Accumulate recommendation on the stock with a target price of Rs 1,220.

Source:http://www.myiris.com/newsCentre/storyShow.php?fileR=20111111113344199&dir=2011/11/11

TCS surged 2.51% to Rs. 1131.80 at 14:29 IST on BSE after the company’s subsidiary won a $2.2 billion outsourcing deal from UK-based pensions and insurance provider Friends Life.
The announcement was made during market hours today, 9 November 2011.
Meanwhile, the BSE Sensex was down 0.53 points, to 17,569
On BSE, 3.38 lakh shares were traded in the counter compared with average volume of 2.53 lakh shares over the past two weeks.
The stock hit a high of Rs. 1145 and a low of Rs. 1106.60 so far during the day. The stock hit a 52-week low of Rs. 902.90 on 6 April 2011 and a record high of Rs. 1247 on 6 April 2011.
The stock had underperformed the market over the past one month till 8 November 2011, advancing 5.23% compared with the Sensex’s 8.24% rise. The scrip, however, outperformed the market in past one quarter, advancing 9.34% as against 3.41% gain in the Sensex.
India’s largest software company by sales has an equity capital of Rs. 195.72 crore. Face value per share is Re 1.
TCS in a press release said that its subsidiary and a business process outsourcing (BPO) services provider in the UK Diligenta today announced that it will assume administration responsibility for 3.2 million policies for Friends Life, a provider of pensions, investments and insurance. The agreement, effective from 1 March 2012 is worth $2.2 billion or £1.37 billion over 15 years.
This major business win will increase the total number of policies administered by Diligenta to just under 8 million. Outsourcing much of its customer service and IT functions for its UK heritage business will allow Friends Life to focus on its new proposition developments, including its new corporate platform, in its core markets of corporate benefits, protection and retirement income, the release added.
TCS CEO and Managing Director and Chairman of Diligenta, N Chandrasekaran said: Our domain-centric, platform-based solutions enable us to help companies transform their businesses. Our strong presence in the Insurance segment, track record and the early investments in building products and platforms have contributed to this win. We are very pleased to partner with Friends Life in this large transformation journey.
Phiroz Vandrevala, Managing Director & Vice Chairman of Diligenta, and Director, TCS said: Our unparalleled experience in the Life and Pension sector coupled with our unique platform capability enabled us to win this path breaking deal. This strategic partnership will allow Friends Life to focus on new opportunities in its corporate markets and grow its business.
Diligenta will assume administration responsibility for much of Friends Life’s closed book protection business and significant part of its corporate benefits business. Diligenta and TCS will deliver IT infrastructure and IT services with some policies migrating to TCS BaNCS Insurance, a globally recognised industry-leading insurance platform.
As a result of this new arrangement a total of approximately 1,900 Friends Life roles across a number of office locations in the UK will transfer under their existing terms of employment to Diligenta. All of those individuals who transfer will continue to service Friends Life’s customers ensuring both continuity of service delivery and expertise.
TCS’ consolidated net profit fell 4.71% to Rs. 2301 crore on 7.75% increase in net sales to Rs. 11633.49 crore in Q2 September 2011 over Q1 June 2011.
TCS is an IT services, consulting and business solutions company. It offers a consulting-led, integrated portfolio of IT, BPO, infrastructure, engineering and assurance services.

Source:http://www.indiainfoline.com/Markets/News/TCS-hardens-as-subsidiary-wins-dollar-2.2-billion-outsourcing-contract/4012854230