Indian IT companies like Cognizant, Infosys play down gains from rupee free fall

A sharp decline in the rupee means Indian IT services exporters are getting more bang for their buck, but most top executives are wary of the sudden dip as it adds to the current uncertainty. The rupee -- Asia's worst-performing currency this year -- has skidded nearly 17 percent from a 2011 high reached in late July as risk-averse investors flee emerging markets. It rebounded as much as 1.7 percent on Wednesday, a day after it touched an all-time low of 52.73. "If the change is gradual we can manage, but if the change happens at the end of the quarter, either way, we will have a big shift. We will not have the time to adjust," Infosys Ltd's Chief Executive S.D. Shibulal said at the Reuters India Investment Summit in Bangalore on Wednesday. Indian IT companies may also not reap the full benefits of a strong dollar as many of them hedge their positions against forex fluctuations. "By the end of September, we had $3 billion hedges in rupee expenses. About 60 percent of our rupee expenses were hedged," a Cognizant executive told Reuters. India's biggest listed biotechnology company Biocon , which receives licensing revenue from its partners Mylan and Pfizer, is not upbeat on the falling rupee either, as gains will be offset by imports getting dearer. "The Reserve Bank of India and the regulators have to rein in the free falling rupee because if you don't do that your imports are just going to cripple the economy," Biocon founder and Chairman Kiran Mazumdar-Shaw said. The rapidly falling rupee is also putting pressure on sectors like autos, infrastructure and realty at a time when high interest rates have already made borrowing more expensive.

TCS, Cognizant, Infosys, Wipro and HCL Technologies on hiring overdrive

Chennai: The hiring numbers of IT majors leave nothing to doubt about how far the companies have left behind the recession.

From the quarter ended March 31, 2010 to the one ended December 31, 2010, the top 5 IT majors in India--Tata Consultancy Services (TCS), Cognizant , Infosys , Wipro and HCL Technologies .-together clocked a staggering figure of 1,14,038 net additions in terms of headcount. This stands in sharp contrast to the net addition figure of 47,462 in the corresponding year ago period.

Net addition subtracts the number of people leaving the company from the gross additions, and, therefore, is a better indicator of the actual increase in staff numbers.

"It reflects the buoyancy in the market. 2009 numbers show the uncertainty and the low sentiments prevailing at that point. Companies are feeling a lot more confident now and can afford some redundancy in anticipation of big projects which wasn't the case earlier," said E Balaji, MD and CEO, MaFoi Randstad, a HR consulting firm.

The numbers have shown a marked increase for each of the big IT companies. The net addition of TCS for the period from March quarter to the December quarter in 2010 was 37,260 which is almost double the figure of 19,311 clocked in the year ago.

Cognizant's net addition numbers increased from 16,700 in 2009 to 25,557 in 2010. Much bigger increases were seen for the other 3 IT majors-Infosys, Wipro and HCL Technologies. The same numbers for Wipro for instance, increased from 3,977 in 2009 to 16,745 in 2010; for HCL Tech, the number rose from 670 to 16,579; and for Infosys, from 6,804 to 17,897.

"During recession, companies weren't recruiting freshers. So there was a deficit, especially at lower levels. So what is happening now is that companies are replenishing the stock, with freshers accounting for a big part of it. The higher attrition in the current buoyant mood in the market is also playing a role in increasing these hiring numbers," said Amitabh Das, CEO of Vati Consulting , a recruitment firm.

Not only are the companies compensating for the lull in hiring, they also anticipate bigger and more valuable projects in the coming times. They are building up bench strengths to handle the bigger size and variety of projects they expect to come their way.

Wipro restructures to take on TCS, Infosys, Cognizant

At least forty senior and middle-level managers at Wipro - the country's third-biggest tech firm undergoing a rejig under the new CEO, TK Kurien - have quit over the past few weeks, as the company attempts to create a leaner organisation focused on fewer strategic bets.

People familiar with these exits told ET that those leaving Wipro include at least half a dozen senior officials across business units, several general managers apart from few dozen junior managers.

Having scrapped the joint CEO model, Wipro plans to do away with any redundancies that existed because of different teams reporting to the two CEOs. Moreover, closer alignment of business units with sales and delivery teams means several overlaps in managers involved with these functions.

'It was always coming - the good thing is that there are enough opportunities this year,' said a person who quit Wipro a few weeks ago. He requested anonymity.

Wipro's attempts to create a more focused organisation better equipped to fend off rivals such as Cognizant is expected to help the company regain lost ground and make substantial progress in markets like healthcare that offer multi-billion business opportunities.

In a year when new business is not hard to come by, companies such as Wipro are realigning their strategic bets. They are putting the best talent to execute their plans