Processing .....please wait.. 
The article has been forwarded.... 
News >> Technology >>
IT to see 10 year low in December quarter
By siliconindia
|
Friday, 19 December 2008, 23:58 IST |
11 Comments
Bangalore: Indian IT biggies like Tata Consultancy Services (TCS), Wipro and Infosys will witness the worst time in almost 10 years in the quarter to be ended December 31st. Analysts predict that a decline in offshoring business from U.S., which accounts for almost 50 to 60 percent of revenue in the companies, will cause the lowest sequential growth in volume in Indian IT.
Most Indian software services firms, with the exception of TCS, opt for so-called time and money contracts where they bill customers by man-hours spent on a project. Their growth in revenue is a function of man-hours (or volume) and billing rates. However, the research firm Merrill Lynch's analyst Mitali Ghosh said that instances of companies wishing to renegotiate rates had grown in the past three months. And also, the risk of companies opting to work with fewer service providers had combined to push billing rates to under $20 an hour in some cases. Hence, the bargain for lower prices will take a huge toll on the companies' revenue.
Since September the economic situation in the U.S. and the rest of the world has worsened. India's software lobby group, the National Association of Software and Service Companies, or Nasscom, had estimated that India's software and back-office services industry would grow by 21-24 percent in the 12 months to March, but its president Som Mittal said on 15 December that this number could be revised downward. India's software and back-office services exports reached $40.4 billion (about Rs1.96 trillion) in the year to March.