Bangalore: The country’s second largest information technology (IT) services exporter Infosys Technologies Ltd has bid for at least 10 large government projects as part of a drive to lower its dependence on the US market, an official said.
Infosys, which gets at least half its business from the US, plans to generate $1 billion (Rs4,870 crore now) in revenue from the Indian market in two-three years versus an insignificant level now, the head of its India business unit said.
“There are large opportunities in India. So, we are definitely going to go after these kinds of businesses very aggressively in India,” Binod Rangadore said. “We have a very healthy pipeline right now.”
The market for technology and business outsourcing services in India is expected to expand fivefold by 2020 to $90-100 billion on the back of a growing economy, according to a recent study by the National Association of Software and Services Companies (Nasscom) and consultancy McKinsey and Co.
Outsourcing firms such as Infosys and rival Tata Consultancy Services Ltd are tapping new markets such as India, China, Japan and countries in Europe to beat a recession in the US.
The Indian firms face competition from big global players such as International Business Machines Corp., Hewlett-Packard Co. and Accenture that have raided their home turf as they look for growth outside their mature markets.
US business software maker CA expects its bookings, an indicator of future business, will rise 50% in the year to March and by 30-40% for the following two years on growing technology spending.
Infosys, which set up its India business unit in late 2007 as part of a strategy to diversify its revenue base, has put in bids for IT services contracts from the railways and state-run telecom Bharat Sanchar Nigam Ltd, among others, Rangadore said. He declined to set a time frame for the outcome of the bids.
The US market had contributed 63.2% of Infosys’ 2008-09 revenue of $4.4 billion, with just 1.3% coming from India.
Rangadore said the business from IT services in India was very small and the bulk of the revenue in India came from Finacle, the banking solutions and services unit of Infosys.
Last month, Infosys said it had won a contract to design, develop and support a portal for the ministry of commerce and industry. A government official said the contract was valued at Rs15 crore for three years. Infosys, which has a market value of $23 billion, has also won a project from the tax authorities for a project to enable electronic filing by taxpayers, Rangadore said. He said spending on technology by private companies was seeing a slowdown in India due to the economic downturn, but investment by the government remained robust and was likely to increase in the near term.
A host of IT services firms are expected to vie for the government’s initiative to provide the country’s around 1 billion people with identity cards, a new project which is being headed by Infosys co-founder Nandan Nilekani.
“The window of opportunity in India is probably in the next one-two years, when most of the decisions will be made for large spending in India,” Rangadore said.
Shares of Infosys, which counts Goldman Sachs, BT Group and Philips Electronics among its more than 550 global clients, ended down 1.1% at Rs1,950.70 on the Bombay Stock Exchange’s Sensex index, which fell 1.5%. The Infosys stock has jumped about 75% this year, compared with a 54% rise in the main index.