TCS shifts market focus after first pangs of a US melt-down

22 April 2008

Mumbai: Tata Consultancy Services, the country's top software export firm, is shifting focus to emerging markets and on sectors besides financial services to help offset a softness in the US economy that could hurt outsourcing deals, its chief executive S Ramadorai said.

TCS, India's largest IT-BPO group, has also offered to give services for free in an effort to lure large clients such as beleaguered US investment and mortgage lenders to sign off big contracts.

TCS said it would bear the cost of "transition work" on select large outsourcing contracts - a move that would impact future earnings.

The costs, which previously were charged on the customers, cover the preparatory work carried out before a work relating to a bank or any other office is outsourced to India.

TCS executives have been complaining for some time of delayed decisions by clients in the banking sector, often after top-level changes in the banks in the wake of the sub-prime crisis.

TCS, India's largest private-sector employer, also missed earnings targets by a sizeable margin. TCS posted fourth-quarter profits of Rs1,256 crore, up seven per cent on the same period a year ago but short of analysts' expectations.