Demand up, but Indian IT firms may fall behind MNC rivals
Friday, 29th April 2011
Many of the software sector analysts are expecting to see stronger demand for IT services over the next four quarters. They have based their analysis on the larger global picture and how companies like Accenture and Oracle have been going about their business. Research firm Forrester has raised the forecast for the US technology market to 8% from 7.4% for the year 2011, and that�s encouraging. Analysts worldwide are predicting that enterprise purchases will grow faster than small and medium size business buying, and verticals like manufacturing and utilities will outpace government, retail, media and leisure.
In India, only TCS is in a position to share that kind of optimism. The Street has upgraded TCS�s earnings in 6 out of the last 7 quarters and that trend is likely to sustain after the current quarter report as well. �TCS continues to show urgency in reducing operational flab and is steadily closing the margin gap with Infosys, while inching ahead on revenue growth,� CLSA said. TCS�s 4.7% quarter-on-quarter growth in dollar revenues should allay fears of an industry-wide demand flux, created after the Infosys report. �We see the TCS result and management commentary increasing investor confidence on sustainability of Indian-tech order books through 2011,� added the CLSA note.
Publication : FE
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