posted nearly 18% growth in India business during the fiscal third quarter, Wipro saw a near 14% expansion in its India State Run Enterprises (ISRE) business. Wipro spun out the ISRE segment in October 2018 for businesses from government-run organisations.
“India enjoyed a second quarter of sustained growth momentum, but coming off a very strict first quarter. Last quarter there was a bounce back from the private sector and this quarter we have also seen increased activity on our assessment and transactional businesses,” TCS chief executive Rajesh Gopinathan said during the quarterly results conference.
The assessment business refers to TCS iON, which is a strategic unit of the company focused on providing academic institutions, government departments and firms from various sectors with the infrastructure for their recruitment/admissions processes and skilling initiatives.
The transactional business refers to engagements where TCS is paid on a per-transaction basis, such as the partnership with the Ministry of External Affairs to issue passports to Indian citizens through the nationwide network of Passport Seva Kendras run by the company.
Both are India-specific businesses at TCS.
Gopinathan, however, said the volatility in growth was because of the low base from the domestic market. “It is not that we are back to very high economic activity or we are not seeing runaway recovery right now,” he added.
At Wipro, the focus of the ISRE segment is to complete some of the long-pending system integration projects in India, chief financial officer Jatin Dalal said. “As you can see, we have steadily improved the execution rhythm in that segment (and) have improved profitability (wherein) we had losses earlier in this quarter,” he added.
Wipro reported ISRE segment revenue of ₹240 crore for the past quarter.
Not every Indian IT services company is “equally” invested in the domestic market, analysts said.
“For example, while companies like TCS, HCL Tech is focused, not all its peers are. The India market offers these companies low margin and at the same time opportunity for consulting business is very small here,” said Sanchit Vir Gogia, chief executive of Greyhound Research.