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By RAJESH MAHAPATRA
NEW DELHI (AP) — 100,000.
That’s the number of new jobs that India’s top five software companies plan to add this fiscal year, riding a boom in outsourcing that’s fattened profits. That’s on top of a record 76,500 new employees who joined these companies last year.
The figures underscore how rapidly US and other Western companies are shifting work to low-cost India, where outsourcing is no longer limited to call centers or back office work such as billing and salary records.
Companies like Tata Consultancy Services Ltd. and Infosys Technologies Ltd. now have thousands of engineers developing software to improve corporate productivity and manage information technology infrastructure.
And despite concerns that rising salaries, a possible slowdown in the US economy and the rupee’s strength against the dollar would hurt business, the latest earnings figures _ released over the past two weeks — show that profits are surging.
Net profit for the top five outsourcing companies — Tata Consultancy, Infosys, Wipro Ltd., Satyam Computer Services Ltd. and HCL Technologies Ltd., ranked in that order — grew to a collective US billion (euro2.2 billion) for the fiscal year through March, up 47 percent.
Sales, meanwhile, jumped 41 percent to a combined US$ 13.6 billion.
And the top four software companies won 713 new clients last year. A figure from HCL Technologies was not available.
"We are seeing robust growth," Infosys Chief Executive Nandan Nilekani told reporters when his company reported a 70 percent year-on-year surge in profits during the January-March quarter.
Nilekani’s confidence appears rooted in the strong economic rationale of the outsourcing business: Western companies will keep shifting jobs overseas so long as they can get the same work done for less money elsewhere.
Indian companies have set up centers in other low-cost countries like Vietnam and Romania so to stay competitive despite rising salaries at home. As a result, they are hiring more people in these countries.
Nearly 10 percent of Tata Consultancy’s employees are now foreign nationals. For Infosys, the number is close to 3 percent.
The outsourcing portfolio has also expanded over the years to increasingly include high-value services, thus enabling Indian companies to charge higher fees and partially offset the impact of a weaker dollar and increased wage costs.
Tata Consultancy, India’s leader in the field, had sales of more than US$ 250 million last year managing IT infrastructure of its client companies, said Ashwin Mehta, analyst at Mumbai-based brokerage Ambit Capital.
HCL Technologies said its focus on remote infrastructure management services — which may include everything from help in installing new software to monitoring network security — helped in winning several large multiyear deals last year.
"The deal sizes are getting bigger," said Mehta.
Tata Consultancy won 12 outsourcing orders worth more than US$ 50 million each last year, while Wipro Ltd. won 10 such deals. Both companies said they are aiming to win similar contracts this year.
"We believe that we have the right ingredients to keep winning," Wipro Chairman Azim Premji said after the company announced its latest earnings.
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