Two US-listed Indian outsourcing firms -- Cognizant Technology and EXLService -- have made it to a list of the world's 100 "hot growth" companies with significant growth potential.

The two Indian firms are among 10 software and services firms that have appeared in the list of companies from around the world.

Cognizant, which is headquartered in the US and having most of its operations and 75 per cent of workforce in India, has been ranked at 15th position, while EXLService is at 57th rank.

The annual list, published in the latest issue of BusinessWeek hitting the news stands on Monday, is led by Heelys Inc, a maker of wheeled sneakers used by kids for skating.

The magazine used Standard and Poor's database of 10,000 public companies with revenues of USD 50 million to USD 1.5 billion a year and the rankings are based on three year sales and earnings growth as well as return on capital.

Only those companies with a market cap of USD 25 million or more and a stock price of at least USD 5 were considered, the magazine said, adding that "profit or stock price shortfalls, or news that put prospects in doubt, may knock a company off the list."

According to the US-based magazine, Cognizant that is the fifth-largest Indian infotech outsourcing firm has consistently racked up better growth rates than its larger rivals with more than 43,000 employees.

In the first quarter this year, the company's turnover rose by 61 per cent to USD 460 million.

"It has outperformed its peers because it has deftly targeted a handful of industry segments where demand for offshore outsourcing is strongest, including financial services, health care, and pharmaceuticals," the magazine said.

Amid concerns over wage inflation and rupee appreciation, which are making Indian labour more expensive, Cognizant is trying to modestly restrain its hiring activities, BusinessWeek noted.

The company's newly promoted CEO Francisco D'Souza had planned hiring more than 17,000 people this year but reduced that number by 1,000, it said.

Another Indian entity in the list, EXLService, which listed in the US last year, has a total headcount of close to 8,200 employees and reported 85 per cent jump in its first quarter revenue to close to USD 40 million.

The company was founded in 1999 and is already providing a vast range of business process outsourcing solutions like transaction-processing services and Internet and voice-based customer care services to Global 1000 companies in banking, financial services and insurance segment.

EXLService has a market cap of close to USD 540 million, while that of Cognizant currently stands at about USD 11 billion.

BusinessWeek noted that Cognizant has been on the list for six years running and seven times since the list was launched in 1985.

The IT services firm faces stiff competition from bigger competitors like Wipro and Infosys, but it continues to offer "better, faster, cheaper" services than other IT outfits, it said. "And being better and faster than the next guy is what Hot Growth is all about."

Courtesy : Expressindia.com

India's central bank governor expressed confidence on Monday that the bank would be able to slow inflation down to closer to 3 per cent well before the timeframe of its midterm inflation goal of 4 to 4.5 per cent.

The Reserve Bank of India aims to keep inflation close to 5 per cent this fiscal year, and had set a goal of bringing it down to 4.0 to 4.5 per cent in the midterm.

"Well before the medium term, we should be able to bring it closer to 3 per cent," RBI Governor Yaga Venugopal Reddy said in a panel discussion at a symposium in Tokyo on India's economy.

India's annual inflation rate fell below 5.5 per cent in early May for the first time in five months after running above 6 per cent for most of this year.

Speaking at the same seminar, Bank of Japan Governor Toshihiko Fukui said he saw signs of increasing inflationary pressure in India.

But in the longer term, India needs to take further steps to make its regulation and tax codes more effective, balance its need for both fiscal consolidation and building infrastructure, and create a more flexible labour market, Fukui added.

"India will need to overcome those medium-term challenges to continue achieving sustainable high growth, while appropriately controlling inflationary pressure," Fukui said.

Fukui added that India's manufacturing sector is becoming competitive and gaining profitability, catching up with its strong service sector.

"I think the potential for the Indian economy to achieve sustainable growth will increase if it moves to a more balanced economy with manufacturing and service sectors both working as the engines for growth," Fukui said.

Reddy said the RBI expects the nation's economic growth to slow to 8.5 per cent in the financial year to March 2008 from 9.2 per cent in the previous year, reflecting an expected slowdown in global economic growth.

But he added that underlying structural factors to keep the nation's growth momentum around 9 per cent, such as the economy's increasing productivity and robust household consumption, will likely remain.

Reddy reiterated that the central bank is aiming to bring down annual inflation to close to 5.0 per cent in the financial year ending March 2008, below the average rate of 5.4 per cent in the last fiscal year.

The level of India's inflation "cannot be too much out of alignment" with that of the global economy as the nation gets increasingly integrated with the rest of the world, Reddy said.

"Therefore, we feel we should, in the medium-term, bring down inflation and inflation expectations closer to 4 per cent," he said.

Asked by Fukui why the RBI, unlike other central banks, has been using wholesale prices, rather than consumer prices, in guiding monetary policy, Reddy said the RBI should ideally use the consumer price index as the target for monetary policy to make international comparisons easier.

But the central bank has been unable to do so because India does not have a single CPI that covers a broad range of industries, he said, adding that the bank is asking the government to create such an index.

On the nation's plan for fuller capital account liberalisation, Reddy reiterated that the Indian central bank will relax capital controls in a gradual manner.

"Going forward, India plans to continue a gradualist approach," Reddy told the seminar.


Courtesy : Expressindia.com

IT behemoth Tata Consultancy Services has taken the lead in setting up its global footprint among the IT/ITeS space in the country with the company boasting of as many as eight offshore units in various nations worldwide, a new study says.

Among the forerunners of Indian IT space, TCS has scored well above its peers with eight offshore units worldwide as against Infosys and HCL's two units each on foreign shores, Wipro's three offices and Satyam's five units, according to KPMG-Nasscom latest study.

The study titled 'Emerging destinations for India IT/ ITES Industry' reveals TCS, has offshore operations in -- Hungary, Argentina, Brazil, Chile, Mexico, China, Malaysia and Canada.

While, Infosys has offshore units in China and Canada, HCL is present in Malaysia and Canada and Wipro has footprints in China, Malaysia and Canada.

All the leading seven Indian IT firms taken in the study have their offshore units in the fastest-growing economy, China except HCL and Patni Computers.

In terms of working population, China has 58.2 per cent of its population in the age-group of 20-59 years and post 2003, its GDP has crossed the 10 per cent mark.

Malaysia has 50 per cent of its population in the age group of 20-50 years and would grow to 60 per cent in year 2025. Since the two countries have the potential of churning out enormous number of graduates and lower wage available there, the Indian IT giants want to get a piece of the pie.

As for the TCS, experts say that if the company lowers the number of employees working offshore down, then the company's revenue can spiral proportionately because employees abroad have to be offered substantially more salary as compared to its Indian counterparts.

Courtesy : Expressindia.com.