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Indian IT firms report sharp declines in growth

Posted: 30 Jul 2008     Print Version  Bookmark and Share

Keywords:information technology  growth rate  global economy  IT services 

After three years of strong growth, India's top 20 information technology providers are reporting sharp drops in annual growth rates as the global economy slows.

Growth rates for the previous 12 months were 24 per cent, down from 41 per cent during the same period a year ago.

Leading IT services exporters also reported slowing annual growth that slipped 16 per cent to 29 per cent year-on-year. The companies were hurt primarily by currency fluctuations, according to a survey by the market researcher CyberMedia.

Most Indian service exporters are paid in U.S. dollars. When the dollar falls in value against the Indian rupee, net sales drop. Still, operating margins held up under the pressure. Currency fluctuations resulted in "an over 10-per cent hit right away in rupee earnings for exporters," said Pradeep Gupta, publisher of CyberMedia.

The survey said Tata Consultancy Services remained the top Indian software services exporter, followed by Infosys Technologies and Wipro Ltd.

Hewlett-Packard led overseas IT services companies in the country last year with over Rs.12,846.20 crore ($3 billion) in sales, followed by Ingram Micro Inc. with over Rs.8,564.13 crore ($2 billion) and Cisco Systems with Rs.5,352.58 crore ($1.25 billion). Intel Corp.'s sales in India were just under Rs.4,282.07 crore ($1 billion), the survey found.

- K.C. Krishnadas
EE Times

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