South Indian IT players bullish about the Union budget

Union budget is round the corner and with this the expectations of market players are also building up. Though because of
elections the market witnessed a brief silence in the first quarter, but the policies and
statements of the newly formed congress led government are giving high hopes to investors. The factors like slashing of product prices, and stable
economy have also added to the aspirations. The keen interest of government in the IT projects is good news for resellers. For example Tamil
Nadu government has also invited the tenders from channel partners to supply 10,000 computer systems for its school project- approved by ELCOT- the nodal
agency of state government. Overall a good business and conducive environment is being expected by the people connected with IT in one way or
the other.

Markets across South India have mixed reactions about AMJ quarter, but high expectations from the forthcoming union
budget as well as from JAS quarter. 

"AMJ was an average quarter for us in business. Even though, April was an
`okay' month, May and June scored well in terms of doubling our sales and targets. We had registered close to 175 percent growth mainly driven by
end-users and corporate clients. Going by this trend, JAS should be a fantastic quarter for us. Moreover, the budget is also going to presented
and we have an expo in July, which will be a driving factor," said director of
Pondicherry-based Siara Systems T Sivakumar. 

However, Auro Enterprises director Suresh Kumar Soni, who belongs to the same region, has a different point to share,
"AMJ is not an exciting quarter for us. We did some good business in April, but it was a spill over from
March. However, May and first two weeks of June took a bad hit and only now, we are seeing some positive developments. But, overall, AMJ was a flop and
now all hopes are only on JAS quarter with union budget and IT expo (in
Pondicherry) on the anvil."

Madurai as such is witnessing a phenomenal growth in business and is all set to become the hub of the region. This is very
much evident from the fact that all distributors are setting up their shops here, with proper warehouse
facility. Now, Madurai is catering to nearby markets such as Virudhunagar,
Sivakasi, Theni, Nagercoil, Tirunelveli, Sivaganga, Rajapalayam and Sattur.

"Home segment is the major contributor for this market and Madurai should be
growing at 30 percent year-on-year. For us, all the three months in AMJ were good in business and home segment contributed a lot, while SME segment
showed signs of picking up. The market is also maturing, as customers prefer to buy new technology solution such as Wi-Fi and mobile
products. Notebooks are doing well," said director of Premier Systems & Peripherals K
Senthilnathan. "I wish the government should not disturb the present tax structure, even if not giving any sops for the IT industry," he added.

"We are able to just reach our targets in AMJ, but there is no any significant growth. However, JAS should be a better period as most of the
educational institutions' orders come during this time," said CEO of Coimbatore-based Ozone Computer Services R Mahesh. He feels that excise duty
should be rationalized to promote more system integrators (PC assemblers)

who can promote their own brands and provide better warranty and service support to the customers. "It can generate more employment in the market,"
he added.

"It (AMJ) is a sluggish quarter and all our hopes now lie only on JAS. The government should invite, in the way of policies,
more MNCs to set-up their projects here which will create more employment and business opportunities
here," said director of Coimbatore-based Ecaps Computer India Pvt Ltd G Suresh.

"Except for some local tax confusion, business was quite good here. In AMJ, we did extremely well and this time, we changed
our business strategy by concentrating only on exclusive product range. In fact, it worked out well
and now JAS looks even more promising for us," said CEO of Cochin-based AGTE George Thomas. Expressing his hopes from the budget, he added,
"The taxes should be completely dropped to keep our prices on par with the global
markets in IT and we can see more business happening in the local markets." 

"Although, AMJ is not exciting for us, but we expect JAS to be good as Onam festival comes during this time. The festive
sales will keep our charts pushing upward," said director of Thiruvananthapuram-based Compu-Needs Gokul
Govind. He feels that custom duty on laptops should be rationalized to promote mobile products growth in the country. 

"Retail sales was good during AMJ. We achieved more than 40 percent growth in this quarter and laptop contributed more
for our growth, as it is a high value product," said Suresh of Karthik Business Machines Pvt Ltd in
Bangalore. 

"We registered 20 percent growth in AMJ when compared to the corresponding quarter of the previous fiscal. We got major
orders from PSUs and government, which kept the momentum up. However, in our Visakhapatnam
branch, we saw home segment doing well during this quarter. Going by the present trend, JAS should definitely be a much brighter period," said
CEO of Hyderabad base Microcare Computers Pvt Ltd PK Chowdary. "I do not expect much of sops for the industry, as the new government, this year, would focus
more on farmers and common people welfare measures," he added. 

S Gopikrishna

Chennai