Tata Consultancy Services Ltd, India's top IT services firm by sales, is seeing an increase in corporate technology spending in Asia-Pacific in the current quarter on signs of economic revival, an official said.
Mumbai-based TCS, part of the Tata Group that spans commodities, autos and services businesses, earned 4.3 percent of June quarter revenues of 72.07 billion rupees ($1.5 billion) from the Asia Pacific region, a share it expects to rise.
"I think there is a generally positive view that Asian economies are coming back," Girija Pande, Tata Consultancy's head of Asia Pacific operations outside India, told Reuters in an interview on Monday.
"Both global and local companies are investing back in Asia and the IT spend, therefore, is going up," he said. "I can already see green shoots in many countries in Asia where the growth is starting to come back again."
After posting a scorching pace of growth for years, India's outsourcing sector has been battling a slowdown as top global customers were hit by the financial crisis and economic downturn.
Pande said most of TCS's clients in Asia Pacific, where Australia, China, Japan and Singapore are key markets, had cut back on IT spending in the first half of 2009.
"People have started opening their wallets," he said, but cautioned that the recovery in technology spending might not be very robust as some large corporations in the region were still seeing pressure on their businesses.
Japan's economy emerged from its longest recession in at least 60 years in the second quarter, according to preliminary figures released on Monday.
Indian software services firms such as Tata Consultancy and second-ranked Infosys Technologies are expanding in Europe and elsewhere to cut their dependence on the U.S. market, which accounts for over half the sector's revenues.
Goldman Sachs, in a report last week, maintained a buy rating on Tata Consultancy as the company had an "optimal combination of geographic exposure, verticals and services" to benefit from a potential economic recovery.
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The Indian firms face competition from big global players such as IBM Inc, Hewlett-Packard and Accenture that are looking for growth in markets such as Asia-Pacific and Latin America.
Pande said Tata Consultancy was seeing a "healthy pipeline" of outsourcing contracts in countries such as Australia, China and Singapore, and most of them were worth $10-$30 million. He declined to elaborate.
Tata Consultancy, which provides services such as consulting, system integration and manages call centres, had not seen any outsourcing deal cancellations in Asia-Pacific because of the economic turmoil, though some projects were delayed, he said.
Pande said the company was on track to raise its headcount in China to 5,000 people in the next five years, up from more than 1,000 now in Tianjin, Beijing, Shanghai and Hangzhou.
Tata Consultancy last month beat expectations by posting a 22 percent rise in quarterly profit, but said the environment remained weak and there was pressure on fees.
Shares in Tata Consultancy, whose clients include Citigroup, General Electric, Lloyds TSB, and Singapore Airlines, fell 1.9 percent to 510.70 rupees, smaller than a 4.1 percent drop in the main market.
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