Financial Daily from THE HINDU group of publications
Monday, Nov 25, 2002
Financial Daily from THE HINDU group of publications Monday, Nov 25, 2002 |
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Info-Tech
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Trends Average billing per client up in September quarter — Software cos set for better days Bharat Kumar
CHENNAI, Nov. 24 MOST Indian software companies have been able to increase the average sales per customer for the quarter ended September 2002 as compared to the same quarter in the previous year. In calculating the average sales per client, the top ten clients for any company have been excluded. This aspect is significant for smaller companies, since some of these have shown an increased percentage of revenue coming from the top five clients, which has been looked upon as a negative development. Analysts feel that the increase in average billing per customer could be due to two reasons — increase in billing rates and increase in man-hours worked — that is, volume. In most cases, it is a combination of both. The increase in average billing rate, excluding top five or top ten clients, is a positive factor, they feel. This suggests that the ramp-up in the case of new clients is happening.
A look at the number of $ 1-million clients gives another perspective. If companies have been able to maintain the contribution from the top five clients and the number of $ 1-million clients has grown, then it is a positive sign. Even if the contribution from the top five clients has gone up (which signals more dependence on less number of clients), and the number of $1-million clients has gone up, it can be considered positive, if the average sale per client has increased. For Infosys, the number of $1-million clients has grown from 84 to 92 year-on-year for the September quarter. For Wipro, that number has gone from 81 to 93. Mastek has increased the number of $ 1-million clients from 15 to 18, while its dependence on the top five clients has gone up from 41 to 57 per cent. And, its average sales per client (excluding top 10 clients), has gone up from about Rs 30 lakh to about Rs 38 lakh. In the case of HCL-Tech, its number of $ 1-million clients has increased from 46 to 64, while the per cent of revenues from top five clients has increased from 21 to 29 per cent. Meanwhile, its average sales per client (excluding top ten) had gone down from about Rs 75.5 lakh to Rs 73.7 lakh. Smaller companies such as Mascot and SSI, though showing an increased dependence on the top five clients for revenue, have also seen an increase in per client average sales. Industry watchers feel that the increase in the number of $ 1-million clients are positive, for it again emphasises the ability of the companies to ramp up operations. In many cases, the addition to the $1-million list and the growth in average billing is higher in this quarter compared to the immediately preceding quarter as well as the corresponding quarter of the previous year. This could be considered as a signal that things are looking up.
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