CHENNAI: All but one of the top six Indian IT services firms, collectively referred to as SWITCH companies, TCS, Infosys, Wipro, Cognizant, Satyam and HCL Technologies, have reported volatile revenue shifts from the financially turbulent North American market in the July-September quarter. The lone exception being Cognizant.
Among the tier-I IT companies, Cognizant has the highest contribution of 78 per cent from the North American terrain in the latest July-September quarter, followed by Infosys at 61.5 per cent and Wipro at 59.4 per cent.
Cognizant clocked the highest incremental revenue from North America in each of the last three quarters among the SWITCH vendors. In the July-September quarter, it recorded incremental revenues of $40.8 million compared to Infosys' $24.8 million and Wipro's $20.9 million.
Sarabjit K Nangra, Vice President of Angel Research, said the IT majors were redistributing geographical focus and diversifying export baskets from crisis hit North America to Europe. This accounted for their lower incremental revenues from North America.
The US had been the dominant export market for the IT industry till recently. Out of the total export revenues of $32 billion in FY 2007, the US accounted for 61 per cent, says NASSCOM.
Now the equation is changing in favour of other geographies.
Reiterating that the economic downturn would be a good opportunity to strengthen contribution across different geographies including North America, Francisco D’Souza, President and CEO of Cognizant, in the latest earnings call, said, “During economic downturns, partners stay and vendors go and we are witnessing clients increasingly turn to us as a trusted advisor to help them through this difficult time.” This proves more than anything else the world is in a recession.