Tata's Getting Bigger


    Tata Consultancy Services Limited held its first call with analysts yesterday as a publicly traded company. (It went public on August 25, 2004 under the Bombay Stock Exchange and the National Stock Exchange.) According to Mr. S. "Ram" Ramadorai, CEO and Managing Director, revenue was up 14% from the previous quarter and 44% from the corresponding quarter in the previous year. Net income, excluding exceptional items, was up 14% over the previous quarter and 52% over the corresponding quarter in the previous year. Bottom line: The company's growing.

    One interesting stat offered by Mr. N. "Chandra" Chandrasekaran, Executive VP, Global Operations: There has been a tiny shift in the pricing model customers are seeking. Last quarter 47% clients sought time and material contracts. This quarter that's up to 49%. Mr. Chandrasekaran predicted that fixed time projects would stay at around the 50% range for coming quarters. The smart folks at META Group would have one believe that both kinds of pricing models were old-fashioned and on the way out — giving way to contracts in which the customer acquired transformational services rather than time-and-material resources and paid based on the business impact. Apparently, not so in the TCS world.

    Also, this largest of Indian IT outsourcing firms currently has 490 active clients. Considering it's a billion dollar operation, I'd have expected more. That's about $50 million per client. (GE is about a $200 million client for TCS.)

    Mr. S. "Paddy" Padmanabhan, Executive VP, HR and Organization Development, shared these tidbits: The company has around 41,000 employees worldwide. They enjoyed on average a 15% salary increase this year. While I haven't seen many salary surveys issued in the last couple of months, I can only imagine that US workers would probably salivate at the prospect of enjoying a raise of that size. The staff grew by about 4,500 people during the quarter.