IT engineering companies are more profitable in non-American countries.

In contrast to IT service providers, a large number of domestic IT engineering service providers—among them, two Tata Group companies—are now reporting that non-American areas account for the bulk of their income. For example, Tata Elxsi and Tata Technologies said that Europe and India account for a significant amount of their sales.

Although Tata Elxsi said in its Q2 results that its earnings were mostly derived from Europe, Tata Technologies’ records with the Registrar of Companies indicate that India is the country from where the majority of its sales originate, followed by Europe.

Larger portions of the income for engineering service companies like KPIT, Cyient, and Axiscades come from non-American regions as well. Contrast this with IT service providers like TCS, Infosys, HCLTech, and Wipro, all of whom get the majority of their business from the Americas.

Europe surpassed Americas to become Tata Elxsi’s largest market during the July–September quarter. In the first half of the current fiscal year, Tata Technologies’ revenue from Europe accounted for thirty percent of its total revenue. Approximately 20% of the company’s sales came from the North American market. Just two years prior, over 32% of its entire income came from North America, and 31% came from Europe.

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