FY 08 was replete with twists and turns right from the rise of the rupee against the stronger dollar. The rise of the rupee affects two metricsoperating margin as a percentage of revenue and the net profit in absolute terms accrued to the company as cash (used for salary payments and expansion).

Incidentally, most large IT services Indian firms have managed to maintain their operating margins, the absolute net margin growth in rupee terms has slowed down. For instance, Infosys registered the slowest top line growth among top export firms but managed to maintain the operating margin by increasing its per employee revenue by close to 5%.

While we have not been able to estimate the exact break-up of the rest of the world revenue, becaue different companies define it differently, it is heavily between Japan, Australia, Singapore, and the Middle East. Indias revenue has not been taken into account here

The IT services exports from India grew 25.7% in FY 08 to reach Rs 132,878 crore, up from previous years Rs 105,684 crore. In dollar terms the market size was $32.9 bn, up 39.9% from last years exports of $23.5 bn. This does not include BPO revenues but includes all other areasproducts, OPD, engineering services and consulting.

After many years, the top 20 exporters grew at the same rate as the industryat 25.8%, and clocked a combined revenue of Rs 101,218 crore or 76% of total IT export revenue from India.

As the Indian economy heated up, the rupee became stronger and hit the IT exports industry

Even though analysts had predicted doom for the smaller companies in tougher times, during FY 08, the reverse happened with the trend of the big getting bigger halted. When the going gets tough, the tough get going applied for the smaller companies, as they proved their resilience. Perhaps the analysts had somehow ignored the arrival of the new-focused specialized services and products firms that would try to differentiate themselves.

Page(s)   1  2