Skip to main content

Are Indian IT companies real technology company or just an employment Bureau??

By

India has successfully written its IT services glory for last 20 years for its cheap labour cost.However this is now not true any longer . That’s why the companies which were once showing 20-40% CAGR growth now struggling for 3-7% growth….

In India we have TCS, Infosys, CTS, TechMahindra and many other companies are doing their business since last couple of decades.

Among all TCS is more valued company with $90 Billion market.

In FY-14 TCS had over 3,00,000 (3 lacs) employees and reported a revenue of $13.44 billion. To grow it’s revenue at the rate of 15% for next 5 years it has increase it’s employee base to 6,00,000 (6 lacs) by FY-19. Managing attrition, productivity, quality and very high fixed wage costs will be a huge challenge for the company. Any downturn in business from western world would severely hurt the company’s financials and profits.



From the above analysis one thing is evident that TCS is increasing their employee base to cater service and do not have real product line up to boost their revenue like Apple , Google and Microsoft etc. All Indian IT companies are staffing companies. In fact in the above case Revenue per employ almost stagnant and it is negative in 2014 if i will compare with 2005!!!!!

Just have a look on Apple revenue per employee which increased YOY.



Note: Investors friendly technology companies dependents on technology for its growth not Human Resources like above.

Mr. Murthy(Ex Infosys Founder) truly told:
  1. Indians have failed to produce any invention that has had global impact like electric bulb, MRI or GPS in the past 60 years.
  2. Murthy claimed that "the only two ideas that have transformed the productivity of global corporations - The Global Delivery Model and the 24-hour workday - came from the company called Infosys". There can't be anything farther from truth than this statement. Indian companies are focused on services based on "Global Delivery Model" and low-end coding business, while American companies sell products.


Why are Indian companies not developing products? Where is the innovation?

Disclaimer:
I have not invested in any of the above IT companies now for this reason.My view may change if i will see any development in any of the Indian IT companies from product and non-liner growth in revenues on the back of innovation..My writing has been inspired by http://vikrammg.com/  ,  http://www.dailyo.in/ and http://www.businessinsider.in/




Labels:

Comments

Post a Comment

Popular posts from this blog

How to become CROREPATI guaranteed :)

By
Crorepati!!!!! Wow J It has been always an aspiration of all of us to become a man of crore… You can become crorepati by ·                      Win a Lottery  (not guaranteed) ·                      Marry a super Rich Girl  (cool technique but girl may ditch you before marriage                 Anytime J ) ·                      Inherit from your parents or from any other relative  (guaranteed) ·                      Buy a quality share and sit tight  (not guaranteed) ·  ...
3 comments
Read more

How Franklin MF Debt scheme closure will affect your returns ?

By
Here I will try to give a perspective opinion of mine on this topic . As you all know we have been going through an unprecedented situation of the century due to COVID19.Till couple of months back nobody have ever thought the world will stand still for so many days where the entire world will go back to decades economic wise and has to restart. Now coming to Franklin , funds which got closed 1.  Franklin Ultra Short Bond Fund – 0.62 years 2.  Franklin Low Duration – 1.46 years 3.  Franklin Income Opportunities – 2.55 years 4.  Franklin Short Term Income – 2.75 years 5.  Franklin Credit Risk Fund – 3.08 years 6.  Franklin Dynamic Accrual Fund – 4.28 years What is the implication of this ? 1.  Your money is locked now until AMC will make the payments. 2.  You can not Purchase,redeem , SWP and STP any longer What is DEBT scheme ? Debt scheme are the schemes where MF/NPS/PMS/ take investor money and buy ...
Post a Comment
Read more

The Monkey , Goat and Stock Story :)

By
So there was this village where one day a man appeared and said that he wanted to buy monkeys. He said that he would pay a hundred rupees per monkey. The villagers caught all the monkeys in the neighborhood and sold them to him for a hundred rupees each. Soon another man appeared and said that he would pay two hundred rupees for each monkey. But there weren't any more monkeys around. They were all owned by the first man. So the villagers went to him and said that they were willing to take the monkeys back and return his money. But the monkey owner was unwilling to sell. The villagers raised the offer price to Rs 150 per monkey, then Rs 175 and finally to Rs 199 but the man just didn't want to sell, even though he clearly didn't have any use for the monkeys. Eventually, just to see whether he would sell, they offered him Rs 200 but he still refused. The villagers were puzzled by this. Finally, one of them figured out that there must be someone else who was going to...
1 comment
Read more