NASSCOM projects Indian IT Software and Services to grow 16-17% in FY 2009

Industry exhibits resilience against global economic turbulence; estimated to exhibit export growth of 16-17% growth in 2008-09

NASSCOM, the premier trade body and 'voice' of the Indian IT-BPO industry, today released the performance for FY 2008-09, for the Indian IT Software and Services sector. According to the findings, the aggregate revenues of the sector are expected to reach USD 60 billion (including domestic revenues, excluding hardware) by FY 09. Export revenues for the Indian IT-BPO industry (excluding domestic market and hardware exports) is expected to record growth of 16-17% in FY09 and clock revenues of USD 47 billion in 2008-09.

Dr. Ganesh Natarajan, Chairman, NASSCOM and Global CEO, Zensar Technologies said, "2008-09 has been challenging for economies across the globe, however the Indian IT-BPO industry has exhibited a balanced growth. The Indian IT-BPO industry is a major contributor to the economy and has a multiplier effect in terms of export earnings, investment, employment and overall economic and social development. We are hopeful that the government will continue to recognize the contribution of this sector and will stimulate investor confidence and growth by extending fiscal incentives to this industry and boosting domestic IT spend through the allocated IT budgets."

"We have seen Europe, Asia Pacific and rest of the world grow more than US, reaffirming geographical diversification as an encouraging trend for this industry. In the last year we have seen an increase in the global footprint of the Indian industry, which now has over 400 delivery centres across 52 countries. This strategy of geographical diversification will also help the industry take forward its competitive edge. In the next 20-24 months, we see a strong focus by organisations on productivity, benchmarking, and enhanced operational efficiencies. From a customers' point of view, the focus will remain on consolidation, integration and regulation – all of which will drive newer business opportunities for the industry."

Mr. Som Mittal, President, NASSCOM said "Due to our strong fundamentals and as a derivative of the value we add to our global customers, the Indian industry will continue to grow inspite of global slowdown. Besides cost savings, customers derive great value from transformation of processes, access to critical resources, quality trained workforce and reduced reaction time, from the Indian industry. India offers the best solution to manage resources and IT budgets and improve competitiveness, even in today's difficult environment. However, factoring the impact of the global economic crisis in the second half of 2008-09, the industry is expected to grow by16-17% by March 2009. Despite an uncertain economic environment, the Indian IT-BPO industry will see sustainable growth over the next two years and our estimates indicate the industry will clock revenues of USD 60-62 billion by FY 11."

"We also feel that this is a time of learning and optimization for the industry, we would urge our member companies to see this as a silver lining", Mr. Mittal concluded.

Mr. Pramod Bhasin, Vice Chairman NASSCOM and President & CEO, Genpact said "At an employee level, the industry continues to focus on training and building higher end skills and capabilities that enable employees to gain domain expertise. Performance benchmarking and skill upgradation will be strong measurement parameters for the industry as customer expectations of Indian companies will be higher. Overall, the industry will remain a net hirer. From an employee perspective, with lower attrition, industry workforce will stabilize and this trend will extend into wage moderation in the coming year. The industry has also spread across tier 2 and 3 cities in India and is creating employment opportunities' for workforce in these centres, and is helping economic development beyond metros."

"NASSCOM continues to focus on its long term initiatives including talent and skill building, security and infrastructure in addition to its focus areas for the year including Green IT and Corporate Governance", he added.

- Export revenues are expected to reach ~USD 47 billion by the end of FY09, growth pegged at 16-17%
- Software and services revenues aggregated to USD 60 billion (including domestic revenues, excluding hardware)
- Domestic IT-BPO market in India to cross INR 1110 billion by FY2009 exhibiting ~20% growth rate
- Growth estimates for FY11 project USD 60-62 billion revenue in exports
- Industry will continue to be a net hirer and focus on value creation, direct employment at 2.23 million; indirect job creation estimated at ~8 million

Source : Equity Bulls

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