IT industry set to achieve growth targets, say analysts

On Monday Nasscom stressed that the BPO and IT sector will live up to its 32 per cent growth prediction for 2004-’05, though many analysts say, investors wish for an overkill.

Nasscom Chairman Kiran Karnik said the visits of international CEOs and Infosys’ joining the billion dollar club showed that sentiments against IT service firms were changing.

Starting with mid-size BPO firm MPhasis BFL reporting on Tuesday, Infosys and TCS will announce their third quarter results this week, and Wipro the week after.

In Q2 of 2004-05, net profits for all three IT majors jumped in the range of 49 to 79 per cent. IT services firm MPhasis BFL, whose net profit fell 80 per cent in Q2, raised its BPO division’s net profit by 58 per cent.

Following the Q2 result announcements in September last year, Infosys upped its guidance for 2004-05 to 39 to 40 per cent, a move analysts said created hopes that other IT majors would follow suit.

IT research firm IDC has said Indian software firms’ exports will grow at a CAGR of around 25 per cent, and the domestic market at roughly 19 per cent until 2008.

NCAER said the sector is likely to maintain growth targets and also remain the key service sector job-creator in urban centres. ‘‘As the super-structure for BPO and IT improve, the growth could well swing upwards,’’ said NCAER sector analyst, R. Venkatesan.