MUMBAI: After decades of low-margin work like server maintenance, India’s information technology services firms are moving upscale in search of lucrative contracts for driverless cars and other advanced projects as online innovation changes clients’ needs.
Companies from Tata Consultancy Services Ltd. to Wipro Ltd. are all joining Infosys Ltd. in investing in new, high-end technology, industry watchers say. Earlier this week Infosys bought US automation specialist Panaya Inc. for $200 million.
Triggering change is a wave of invention allowing machines to talk to each other online, dubbed ‘the Internet of things’. Customers are ramping up: from about 5 percent now, strategy adviser Offshore Insights estimates automation and artificial intelligence work will grow to 25 to 30 percent of an IT outsourcing market seen by the national industry association as worth $300 billion by 2020.
“We’re in the midst of a new wave of software, and IT services companies really don’t have a choice,” said R. Ray Wang, principal analyst and founder of Silicon Valley-based Constellation Research.
As well as deals, the prospect is spurring heavy investment. Third-largest IT services exporter Wipro is building computing systems designed to mimic human decision-making abilities, where machines can understand and react to what human beings say to them.
HCL Technologies, meanwhile, is using robotics to do away with manual testing of hardware.
Though carrying higher profit margins, the new business lines are not as big-ticket as traditional large-scale outsourcing projects, meaning revenue may be reduced in the short term, analysts say.
Infosys and peers may also find themselves competing in some cases with global majors such as Google Inc, now developing artificial intelligence business and working on projects including self-driving cars.
But industry watchers see plenty of business openings for players like Tech Mahindra. Its engineers are busy testing consoles for cars that can monitor driver fatigue and predict signs of heart attacks, as well as working on a technology for driverless cars.
“The larger point here is Internet of things,” said KS Viswanathan, vice president of industry initiatives at the National Association of Software and Service Companies.
“If you look at any automobile today, 25-30 percent of what goes in is electronics.”
“Tech Mahindra will take (its technology) to its global clients...A Volkswagen cannot suddenly change all cars to be software-driven like a Google car is, they have to work with what they have and use technology that fits.”
Indian companies are looking to collaborate with startups to jointly develop solutions for clients and in some cases are also eyeing takeover opportunities to get access to skills needed to wins these contracts, said industry officials.
“The catchwords today are digital, analytics, robotics,” CP Gurnani, CEO of Tech Mahindra said.
“It is a small part of business, we are still not at the inflection point. But we are laying down the roadmap.”
IT firms eye robotics, driverless cars for next round of growth
IT firms eye robotics, driverless cars for next round of growth
Closing Bell: Saudi main index slips to close at 11,228
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, lost 23.17 points, or 0.21 percent, to close at 11,228.64.
The total trading turnover of the benchmark index was SR2.99 billion ($797 million), as 170 of the stocks advanced and 82 retreated.
On the other hand, the Kingdom’s parallel market Nomu gained 449.38 points, or 1.90 percent, to close at 24,093.12. This comes as 43 of the stocks advanced while 27 retreated.
The MSCI Tadawul Index lost 6.07 points, or 0.40 percent, to close at 1,511.36.
The best-performing stock of the day was Obeikan Glass Co., whose share price surged 7.54 percent to SR27.66.
Other top performers included Alamar Foods Co., whose share price rose 6.80 percent to SR47.10, as well as Saudi Kayan Petrochemical Co., whose share price climbed 6.79 percent to SR5.66.
Saudi Investment Bank recorded the steepest drop, falling 3.21 percent to SR13.56.
Jahez International Co. for Information System Technology also saw its share price fall 3.15 percent to SR13.55.
Rabigh Refining and Petrochemical Co. declined 2.78 percent to SR7.34.
On the announcements front, Tanmiah Food Co. reported its annual financial results for the period ending Dec. 31. According to a Tadawul statement, the company recorded a net loss of SR18.8 million, compared with a net profit of SR95.8 million a year earlier.
The net loss was mainly due to ongoing market challenges that resulted in continued pricing pressures in fresh poultry, inflationary cost pressures, higher financing expenses, and depreciation and ramp-up costs from new facilities, partially offset by increased production volumes and cost-optimization initiatives.
Tanmiah Food Co. ended the session at SR58.20, up 3.72 percent.
United International Holding Co., also known as Tas’heel, announced its annual financial results for the period ending Dec. 31. A bourse filing showed the company recorded a net profit of SR273.64 million in 2025, up 23.05 percent from 2024, primarily driven by a 23.4 percent rise in revenues. The revenue growth helped lift gross profit by 23.7 percent.
Tas’heel ended the session at SR146.80, down 0.28 percent.
