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Bharat Kumar

CHENNAI, May 8

DECREASING revenues per client and increased dependence on the top 10 clients seem to be the trend for Indian software companies.

Only Infosys Technologies seems to have bucked the trend on both counts. Typically, say experts, a good business always spreads dependence across a wide base of clients and over time, reduces dependence on the top few clients.

For Infosys, revenues from the top 10 clients as a percentage of total revenues has also decreased to 37 per cent for the year ended March 31, 2003 from 39 per cent for year ended March 31, 2002.

For Wipro, that figure increased to 41 per cent in 2003 from 38 per cent in 2002. For Satyam, it increased to 53 per cent from 52.3 per cent.

Per client revenues have been computed using revenues from clients excluding the top 10 clients.

Comparison between the years ended March 2003 and March 2002 reveals that Wipro Tech and HCL Tech have seen a slump on this count, while Satyam and Mastek have both seen an increase in revenues per client.

For SSI Ltd's software and consulting business, for the quarter ended March 2003, revenues per client have fallen by about a third to Rs 4.99 lakh compared to the same quarter in the previous year.

On the revenue growth front, only Infosys has shown a slower growth rate in revenues from the top 10 clients as compared to growth in revenues from the remaining clients.

The reverse has happened to the other companies.

SSI Ltd's software business saw revenues from top 10 clients slump by around 52 per cent compared to a revenue slump of about 78 per cent from the remaining clients between the last quarters of the fiscal gone by and the previous one.

These figures, looked at along with the increase in number of $1-million clients and $5-million clients, give an idea of the shape of the industry.

Industry watchers are of the opinion that if companies have been able to maintain the contribution from the top 10 clients and the number of $1-million clients has grown, it is a positive sign.

Even if the contribution from the top 10 clients has gone up - which signals more dependence on fewer clients - and the number of $1-million clients has gone up, it can be considered positive if the average sale per client has increased, they added. Mastek would fall in this category.

Infosys increased its $1-million client numbers from 99 in March 2002 to 115 in March 2003. Wipro increased that number from 82 to 96, while its $5-million client numbers also increased by four to 27.

Mastek said that clients with a "potential to generate $1 million" went up from 14 to 18.

HCL saw the number of such clients go up from 54 to 67, while its $5-million client numbers slumped from 14 in December 2002 to 12 in the latest quarter.

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