In net income, IBM, HP, ADP, Accenture, CSC, TCS, Infosys, Wipro, ACS and Atos Origin lead the global pecking order, while the top 10 list by m-cap includes IBM, HP, ADP, Accenture, TCS, Infosys, Wipro, EDS, CSC, and Cap Gemini. [source]
TCS might muscle itself into the top 10 IT services companies' club sooner than it anticipated. Though the Top three Indian IT services companies are nowhere near in terms of topline, The Top Indian IT companies comes in the top 10 in terms of net Income and Market capitalisation. Two parameters that is used in acquiring compapnies. These companies have been playing around with acquisitions for sometime now with small sub-100 million dollar acquisitions. Perhaps they were warming up, but with the kind of Cashflows and Market Value of the Indian IT cos, it will not be very far, let me even go on to say 2007-08, they Big companies like Accenture, EDS become take over targets of Infosys, TCS. These companies might not want to sell out, but there are some companies(in the top 10) that are already struggling with slow growth, and losing Bids.
Financiers are willing to back Indian companies in LBOs, Indian companies which were never in the radar, in Industries where we hadn't even proven ourself.
Outsourcing however is a different story altogether. Indian IT industry pioneered outsourcing. Not so long ago, Industry Oracles lamented about how Indian IT companies might lose out to American MNCs since they were based out of where the clients are. During that time, the US MNCs knew that more than their vicinity to clients, they needed to build up capacity in India. They were imitating what the Indian Comapnies were doing. Now who will the Financiers back?
It is not a question of which companies will be acquired. It is just a matter of which Company will be the first to move amongst TCS, WIPRO, Infosys and Cognizant. Perhaps Wipro going by past records, or perhaps TCS going by recent records.