How Indian IT is fighting recession

The Indian IT industry managed to limit the impact of global recession last fiscal and maintain the growth momentum, albeit lower than that in the boom times, says tech publisher Dataquest.

"Export firms did better in recession-hit developed markets than those whose business is limited to the Indian market," Dataquest editor Prasanto K Roy said.

Though the business of top 20 firms led by Indian IT bellwethers TCS, Infosys and Wipro, and multinationals such as HP and IBM, grew by an average 19 per cent, seven of these posted single-digit revenue growth.

"Overall, the top 20 Indian software and hardware firms reported a combined revenue of Rs 183,621 crore (Rs 1.84 trillion/$39.52 billion) in 2009, compared to Rs 149,250 crore (Rs.1.49 trillion/$32.12 billion) in 2008," Roy said, citing findings of a survey.

Among the seven, four are multinational subsidiaries -- Microsoft India, which grew a mere one per cent year-on-year to Rs 32.98 billion (Rs 3,298 crore); HP India up two per cent to Rs 157.63 billion (Rs15,763 crore), Oracle three per cent to Rs 59.62 billion (Rs 5,962 crore) and Cisco by four per cent to Rs 60.84 billion (Rs 6,084 crore).

"One of the reasons for export-driven firms maintaining the growth is because of increasing IT outsourcing in a downturn to keep costs flexible. In the domestic market too, global firms such as IBM and Wipro fared very well," Roy averred.

Among the top 20 firms, eight firms grew fastest despite slowdown and negative sentiment in the market.

These include Mphasis, with revenues increasing 69 per cent to Rs 31.73 billion (Rs 3,173 crore); HCL Infosystems, up 60 per cent to Rs 80.89 billion (Rs 8,089 crore) and Cognizant Technologies, up 49 per cent to Rs 94.10 billion (Rs 9,410 crore).

The IT bellwethers also posted healthy growth rates. TCS was up 22 per cent to Rs 25,895 crore; Infosys, up 31 per cent to Rs 20,392 crore, and Wipro up 41 per cent to Rs 23,882 crore.

Multinationals such as SAP India grew 33 per cent to Rs 4,320 crore, Dell India by 32 per cent to Rs 4,266 crore, IBM India by 19 per cent to Rs 12,048 crore and Accenture by 16 per cent to Rs 4,400 crore.

With a decline of 18 per cent in its growth, hardware firm Lenovo failed to make it to the top 20 club. Korean major Samsung also saw growth falling 40 per cent to Rs 1,200 crore from Rs 2,014 crore.

Export revenues do not include that of business process outsourcing (BPO) services.

Scam-tainted Satyam Computer Services has been left out of the top 20, as its financial performance came under cloud following the Rs 78-billion (Rs 7,800-crore) accounting fraud by founder-chairman B Ramalinga Raju.

The Dataquest survey findings are lower than the projections made by the IT industry's representative body -- National Association of Software and Services Companies (Nasscom) -- for 2009-10.

With the industry's annual growth rate dipping to 16-17 per cent from about 30 per cent in 2004-2008, the aggregate revenues was estimated to be $60 billion, including export revenue of $47 billion.

In view of the prevailing uncertainty, Nasscom has taken a two-year view to factor in the volatile environment and estimated that the IT industry would grow at 15 per cent to achieve export revenue of $60-62 billion by 2010-11.
Source: IndiaTimes.com