Top Indian software firm Tata Consultancy Services unveiled a new push Monday to get work from banks and finance firms outside the US to lessen its reliance on dollar billing.
Unveiling a new facility in Bangalore, to be staffed by 2,720 people who will increase to more than 3,200 by next March, company officials said they will focus on clients in the Asia-Pacific, the Middle East and Africa.
TCS, as the Mumbai-based software maker is known, and rivals are trying to reduce dependence on a US market that makes up two-thirds of the sales for India's 50-billion-dollar information-technology industry.
The rupee's 10 percent appreciation against the US currency this year is reducing the local-rupee equivalent of every dollar software makers earn, forcing them to look to alternative markets for future growth. "The whole idea is to present ourselves across multiple geographies," said Subramaniam Ramadorai, chief executive officer.
"I dont think we have any mechanism to control what the government of India does or what the Reserve Bank of India does." The rupee's surge has been fuelled partly by the central bank's hands-off approach towards foreign-exchange markets and investment flows into an economy expanding more than nine percent a year.
The central bank has been trying to soften the impact of inflation by allowing the rupee to rise, which makes imports such as crude and edible oils cheaper.
TCS is also trying to beat the rupee's appreciation by tapping new customers who pay more and by improving productivity gains, Ramadorai said. The company has hedged about 2.5 billion dollars of anticipated revenue against the rupee in the financial markets, he said.
Finance firms provide about 40 percent of the revenues for TCS, part of the tea-to-trucks Tata conglomerate, which counts Deutsche Bank, Bank of China, ABN Amro and State Bank of India among its clients.
In the past year, TCS added 63 financial services clients to take the overall number to 225, competing with global giants including IBM and Accenture. TCS and other Indian software makers have grown rapidly in the past decade by providing software services that help global clients lessen their business costs by leveraging on India's low-cost engineering talent.
That competitive edge however has been eroded by the surging rupee, forcing companies to explore options ranging from working an extra day a week to expanding in China and Vietnam.
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