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May 22, 2013, 08.45 AM IST | Source: CNBC-TV18

Aim to scale up all 6 Chinese hubs: TCS' Chandrasekaran

TCS is present in six locations in China-Beijing, Shanghai, Shenzhen, Tianjin, Dalian and Hangzhou. N Chandrasekaran MD and CEO said, we need to increase our presence in state run enterprises in China

TCS announced plans to to scale up each of its hubs in China into double or triple their current size. "However, business development and hiring need to work hand-in-hand,” said N Chandrasekaran, MD& CEO in an interview to CNBC-TV18.

TCS is present in six locations in China — Beijing, Shanghai, Shenzhen, Tianjin, Dalian and Hangzhou.

On Tuesday, Chinese Premier Li Keqiang visited Tata Consultancy Services (TCS) facility in Mumbai. He was apprised of the group's operations in his country by top officials that included Tata Group Chairman Cyrus P Mistry and N Chandrasekaran.

He further added that they also need to increase presence in state run enterprises in China.

Basically, our China business constitutes of two parts. One where we do work for multinationals for their operations in China and second is work that we do for state owned enterprises like banks, insurance companies, he explained.

Also read: Li visits TCS, Mistry says China important for Tatas

Below is the verbatim transcript of his interview on CNBC-TV18

Q: Where do you see the real big opportunities as far as Tata Consultancy Services (TCS) and the IT sector in general is concerned because there has been a lot of talk this time around when we have been engaging with the Chinese. The Chinese Premier saying that Indian companies will be given preferential access, there is the likelihood of large government contracts being given out to Indian it vendors. Is that going to be the big opportunity for you and on an average what is the kind of deal size that you have traditionally seen coming in from China, you have been working there as one of the first IT companies for almost a decade now and what can we expect going forward?

A: Our China business it is of two parts. One is the work that we do for the multinationals, for their operation in China and Asia. The second portion is the work that we do for the local market, in terms of the banks, in terms of the insurance companies or state owned enterprises and the governments.

In the second part, the size of the deals vary from few millions to tens of million. The largest contract we ever did was the Bank of China contract which was 97 million. We need to figure out a way of increasing our presence in the state owned enterprises because they form the single largest portion of economy in China. We do some projects in the intelligent infrastructure, so, we need to increase the presence in these areas.

Q: Does TCS have plans to ramp up hiring in China significantly. You have about six centres that you operate out of currently, in China. Are you looking at hiring more people and setting up more centres?

A: We have six centres and we want to scale each one of those centres to significant size. Currently we have about 3000 people in these six centres and we need to scale each of these centres. The opportunities are to scale double, triple in size but we need to time it along with the way our business development happens.

We need to work hand in hand between business development and hiring. However, it is a big market and we definitely want to be scaling in that market.


 

 

TCS stock price

On October 30, 2014, Tata Consultancy Services closed at Rs 2557.90, up Rs 55.25, or 2.21 percent. The 52-week high of the share was Rs 2834.00 and the 52-week low was Rs 1960.00.


The company's trailing 12-month (TTM) EPS was at Rs 99.52 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 25.7. The latest book value of the company is Rs 224.90 per share. At current value, the price-to-book value of the company is 11.37.

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