IT industry body Nasscom on Thursday said it maintains its growth projection of 11-14 per cent for the current financial year and will review it in October,even as some member companies have given muted forecast amid global economic uncertainties.
“We don’t think it is in need for us to change it … we will review it back in October and if need we could raise it upwards or downwards,” Nasscom President Som Mittal told reporters here. He added fundamentals of the industry still remain extremely strong. Mittal said when Nasscom gave its forecast in February,it was termed as “conservative”,but as some companies have reported muted earnings in the January-March quarter of last fiscal,the forecast is being seen as too optimistic.
“We gave this forecast in February and we were told how conservative we are and when are you going to revise it upwards. And then one quarter of results came out and then we are suddenly asked: you are so optimistic nobody aligns with you and when are you revising it downwards…,” he said. The National Association of Software and Services Companies (Nasscom) in February forecast that export revenues from the infotech and IT-enabled services sector would grow between 11 per cent and 14 per cent in US dollar terms,while the domestic market would grow 13-16 per cent in rupee terms. However,the global economic uncertainty has led to flat or reduction in budgets for outsourcing services by western clients,fanning fears of reduced margins. Indian IT players get almost 80 per cent of their revenues from the US and European markets.
Infosys and Wipro have already given muted guidance for this fiscal.
“There will be differentiated growth,some companies will do better some less,we have a huge traction happening in the mid-size companies which are growing at over 20 per cent,” Mittal said.
Nasscom also forecast the revenue potential for the sector to reach USD 225 billion by 2020,which comprises USD 175 billion from exports and USD 50 billion from domestic activities. Mittal said despite increasing competition from countries like Philippines and Brazil,India’s share in the global sourcing space stood at 58 per cent it grew 2-3 per cent last year.
He,however,cautioned that as multiple countries are trying to compete in the sourcing space,India cannot take the leadership for granted.
“We have to ensure a favourable business environment like a stable,consistent…predictable tax regime and elimination of administrative hassles,” Mittal said. Asked about the impact of Eurozone crisis on domestic IT companies,he said it is very small.
“We do have a presence in these countries but very small. We are there because our customers. Our focus is in Scandinavian countries,” Mittal said.
Eurozone countries like Italy,Spain and Greece are battling sovereign debt crisis that has made it difficult for them to re-finance their government debt without the assistance of third parties.
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