DQCI SILVER CLUB: Back in Top Gear

DQCI SILVER CLUB: Back in Top Gear

The financial year 2003-04 was truly an outstanding one as far as the Indian IT industry is concerned. The industry grew by 24% to gross $20 billion plus. While the previous year (2002-03) was the year of recovery, fiscal 2003-04 can safely be termed as the year of growth. And growth was there not just in numbers. More importantly, growth was there in terms of confidence in the market.

What is even more significant is the fact that for the first time in 10 years, Indian domestic market growth was on par with exports. Without doubt, the year gone by can safely be called as the year of the domestic market as growth shot up from 9% to 24%. This clearly indicates that the market has regained its lost confidence and is now racing to make up for the lost time.

Moving away from the way we have been presenting the Silver Club earlier, this year we have two distinct sections-Solution Providers and Distributors. In both the sections, we have profiled 50 organizations, split into the Top 25 and Next 25.

The Distributor section also includes the Regional Distributors (RDs) and Sub Distributors (Sub Distys) besides the national distributor. And perhaps the most interesting fact which has come up in this section is that HCL Infosystems has emerged as the number one distributor of the country.

The reason why HCL is the number one can be summed up in one word-Nokia. It is the sole distributor of Nokia mobile phones in the country. As a result of the booming cellular market in India, HCL logged in sales amounting to Rs 2,468 crore from Nokia alone.

In fact, distributing mobile phones is a new line of business which all the major distis are aggressively pursuing. Ingram Micro sells Samsung, Tech Pac does Panasonic and Redington is into Ericsson. This line is geared to give these biggies a very good topline.

Another interesting aspect of this section is the virtual bunching of distis into different groups. While the three major biggies are close to the Rs 2,000 crore mark, the next rung of distis like Iris, Neoteric, Rashi, Savex and SES are in the sub Rs 300 crore group. The gap between the two groups is extremely huge. Then the third group comprises of RDs and sub-distys who log revenues below Rs 100 crore and have a very limited area of operation.

Contrary to the high growth rate of topline seen in the case of distributors, the growth shown by Solution Providers is much more sedate. Perhaps it is an indicator of their focus on bottomline and also trying to maximizing the value they offer to their customers.

While HCL Infosystems leads the Distributor section with a topline of Rs2,795 crore, its traditional rival Wipro Infotech is the number one Solution Provider of India with a topline of Rs 869 crore, having grown by roughly 14 percent. In comparison, HCL's topline raced ahead by a whopping 33 percent.

So, what's the key message which can be gathered? It would be the fact that the market has moved back into the top gear and all signs point towards a boom situation. The key now lies in the hands of the smart companies who can ride along the boom and reap rich dividends.