Outsourcing as a business is creating a boom in India. And companies are making projections on their revenue based on some of the ongoing deals, but seem to suffer when their own projections fail them, the recent example being Satyam computers. Its revenue was reduced to 525 crores from the projected 540 crores. Ok what is the consequence of all this, well to put it in one way when the company fails to meet its own projection its share price comes down and many of the ongoing projects suffers a little because of the reduction in the expected revenue. Coming back to Satyam, one might ask why it failed to meet its own projection? Answer given by Satyam is that the multimillion deal that was in process has been withheld for the time being, and the reason for that might be the ongoing reluctance of many companies to spend more on the IT sector and the uncertainty in the market. Another example is HCL, though HCL made a quarter to quarter increase by about 6%, yet it seems to have suffered to the revenues it had earned last year.
What does the big daddy of India, Infosys say on this. As usual Infosys seems to have predicted this and has refused to make any projections based on multimillion dollar business deal, because of the long gestation period involved in finalising the deal and commencing the project, and also because of the existing situation in the market. Well I guess others need to learn from the big daddy!
Source: Jan 30, 2003-The Economic Times of India