Source:Economictimes.indiatimes.com

Two US-listed Indian outsourcing firms — Cognizant Technology and EXLService — have made it to a list of the world’s 100 ‘hot growth’ companies with significant growth potential.

The two Indian firms are among 10 software and services firms that have appeared in the list of companies from around the world.

Cognizant, which is headquartered in the US and having most of its operations and 75% of workforce in India, has been ranked at 15th position, while EXLService is at 57th rank.

The annual list, published in the latest issue of BusinessWeek hitting the news stands on Monday, is led by Heelys Inc, a maker of wheeled sneakers used by kids for skating.

The magazine used Standard and Poor’s database of 10,000 public companies with revenues of $50 million to $1.5 billion a year and the rankings are based on three year sales and earnings growth as well as return on capital.

Only those companies with a market cap of $25 million or more and a stock price of at least $5 were considered, the magazine said, adding that “profit or stock price shortfalls, or news that put prospects in doubt, may knock a company off the list.”

According to the US-based magazine, Cognizant that is the fifth-largest Indian infotech outsourcing firm has consistently racked up better growth rates than its larger rivals with more than 43,000 employees.
In the first quarter this year, the company’s turnover rose by 61% to $460 million.

“It has outperformed its peers because it has deftly targeted a handful of industry segments where demand for offshore outsourcing is strongest, including financial services, health care, and pharmaceuticals,” the magazine said.

Amid concerns over wage inflation and rupee appreciation, which are making Indian labour more expensive, Cognizant is trying to modestly restrain its hiring activities, BusinessWeek noted.

The company’s newly promoted CEO Francisco D’Souza had planned hiring more than 17,000 people this year but reduced that number by 1,000, it said.

Another Indian entity in the list, EXLService, which listed in the US last year, has a total headcount of close to 8,200 employees and reported 85% jump in its first quarter revenue to close to $40 million.

The company was founded in 1999 and is already providing a vast range of business process outsourcing solutions like transaction-processing services and Internet and voice-based customer care services to Global 1000 companies in banking, financial services and insurance segment.

EXLService has a market cap of close to $540 million while that of Cognizant currently stands at about $11 billion. BusinessWeek noted that Cognizant has been on the list for six years running and seven times since the list was launched in 1985.

The IT services firm faces stiff competition from bigger competitors like Wipro and Infosys, but it continues to offer ‘better, faster, cheaper’ services than other IT outfits, it said. “And being better and faster than the next guy is what Hot Growth is all about.”

Source:www.hindu.com

IT behemoth Tata Consultancy Services has taken the lead in setting up its global footprint among the IT/ITeS space in the country with the company boasting of as many as eight offshore units in various nations worldwide, a new study says.

Among the forerunners of Indian IT space, TCS has scored well above its peers with eight offshore units worldwide as against Infosys and HCL’s two units each on foreign shores, Wipro’s three offices and Satyam’s five units, according to KPMG-Nasscom latest study.

The study titled ‘Emerging destinations for India IT/ ITES Industry’ reveals TCS, has offshore operations in — Hungary, Argentina, Brazil, Chile, Mexico, China, Malaysia and Canada.

While, Infosys has offshore units in China and Canada, HCL is present in Malaysia and Canada and Wipro has footprints in China, Malaysia and Canada.

All the leading seven Indian IT firms taken in the study have their offshore units in the fastest-growing economy, China except HCL and Patni Computers.

In terms of working population, China has 58.2 per cent of its population in the age-group of 20-59 years and post 2003, its GDP has crossed the 10 per cent mark.

Malaysia has 50 per cent of its population in the age group of 20-50 years and would grow to 60 per cent in year 2025. Since the two countries have the potential of churning out enormous number of graduates and lower wage available there, the Indian IT giants want to get a piece of the pie.

As for the TCS, experts say that if the company lowers the number of employees working offshore down, then the company’s revenue can spiral proportionately because employees abroad have to be offered substantially more salary as compared to its Indian counterparts.

Another leading IT firm Cognizant, having offices in Chennai, Hyderabad, Kolkata, Bangalore, Pune and Mumbai, also has offshore operations in China, Malaysia and Canada.

Cognizant has aligned its businesses vertically and has clients in banking & financial services, healthcare, manufacturing & logistics, media & entertainment, telecom, insurance, life sciences, retail and hospitality.

One of the pioneers in Business Process Outsourcing, Genpact has operations at China, Romania, Hungary, Mexico and UK along with India. HCL’s industry verticals are telecom, retail, financial services, logistics and utilities and is operated at Malaysia, UK and Canada.

Besides, Infosys has ventured its expansion to aerospace and automobile, banking & capital markets, communication service providers energy, utilities & resources though lags behind with just two offshore operations. Patni Computer Systems which has more than 200 Fortune 1,000 companies as its clients and has its offshore BPO centre at Canada.

Satyam with activities in healthcare, insurance, pharma, banking and financial services, manufacturing and automotive in BPO has also sets its sight afar at Hungary, Brazil, Malaysia and Canada but its still quite far behind TCS.