Indian software and services exports

A NASSCOM press release states that the software and services export revenue has grown by 34.5% this financial year. The highlights are:

• Total Indian IT and ITES revenue = USD 22 billion, a growth of 32%
• IT and ITES export = USD 17.2 billion a growth of 34.5%
• Domestic IT and ITES revenue = USD 4.8 billion, a growth of 24%
• IT export (without call centre and other ITES export revenue) = USD 12 billion, a growth of 30.5%
• ITES export = USD 5.2 billion, a growth of 44.5%
• Projected export growth for the current financial year = 30-32%, which means we are targeting IT and ITES export revenue to touch USD 22.5 billion.

Even if the domestic IT and ITES growth rate remains the same 24%, the projected IT and ITES revenue for 2005-06 will be USD 28.5 billion.

An overall growth rate of 30-32% is not good enough! India should b e targeting at a growth rate of 50% or more. Probably 70% if we are looking at doubling the IT sector revenue in the next 2-3 years to reach USD 50 billion. The leading companies will have to think very differently than adding another 10,000 new employees each year. Put all the idle money in the hands to acquire good, small time product companies abroad. Look at considerable value-additions to the existing customers in the process. Any acquisitions this year will probably bear fruit only two years down the line.

NASSCOM has also announced the top 20 software exporters based out of India. The list excludes companies which are incorporated in another country but having operations in India, but includes subsidiaries of foreign companies incorporated in India. Thus Cognizant, Syntel, Covansys, Intelligroup are out, IBM Global Services India, Perot Systems India, Siemens Information Systems India are in. The top 10 are:

No.	Company	Rs Crore	USD mn
1	Tata Consultancy Services Ltd	7449	1644
2	Infosys Technologies Ltd.	6806	1502
3	Wipro Technologies	5426	1198
4	Satyam Computer Services Ltd	3377	745
5	HCL Technologies Ltd	2664	588
6	IBM Global Services India Pvt. Ltd.	1867	412
7	Patni Computer Systems Ltd.	1548	342
8	i-flex Solutions Ltd	1110	245
9	Mahindra British Telecom Ltd.	913	202
10	Polaris Software Lab Ltd	913	202

Infosys has projected a revenue increase of at least 33% for FY 2005-06. I guess other leading companies project a similar rate. This is why NASSCOM has projected an overall increase of 30-32%, conservatively.