Top 20 IT companies post 24% growth, down from 41% last fiscal

The Top 20 IT companies' in India, a majority of them engaged in IT services exports, recorded a revenue growth of 24 percent in the FY 2007-08 as compared to 41 percent in the previous year. The Top 20 IT services exporters, however, recorded a growth of 29 percent compared to a growth of 45 percent recorded in FY 07. This has been revealed in part one of the four-part annual analysis of Indian IT industry by CyberMedia's flagship publication Dataquest.

A stronger rupee adversely impacted the exports-heavy Indian IT industry in FY 08 when the average value of rupee in comparison to dollar rose nine percent with a vast majority of the IT companies still unfazed by a slowdown in the global outsourcing industry.

In the Dataquest listing of the top 20 IT companies from India, the top seven positions remained unchanged, with TCS, Wipro, Infosys, HP India, IBM India, Ingram Micro and Satyam Computer Services retaining their positions, from number one through 7. (HP India and Ingram Micro derive a major part of their revenues from the sale of computer systems and peripherals, while the others make money from exports of software services; IBM India has significant services-domestic and exports-revenue, as well as systems sales.) Unlike the previous year, there was no major change in the rankings in the top 14 positions with number company moving up or down by more than two places.

The DQ Top 20 Club-the ranking of top IT companies in India by revenue-also saw changes, with three new companies entering the list, while three exports-led firms made their exit. Interestingly, all the three new entrants are non-Indian firms-Accenture, SAP and Dell, which replaced three Indian firms, Teledata, Patni and Moser Baer that ranks amongst the Top 10 CD makers in the world.

The most spectacular story is the entry of Accenture India at number 15 and SAP India, which rose six positions to be a number 18, driven by a strong performance in SME market that helped it record 84 percent growth.

The Dataquest Top 200 annual survey, now in its 25th year, reflects the 'services exports' phenomenon driving Indian IT. The number of services firms in the list of Top 200 companies rose to 95 in FY 08 compared to 86 in the previous year. The Dataquest study notes that despite a rise in the value of rupee, most export services firms managed to maintain their operating margins.

“After three years of strong growth, FY 07-08 was a challenging year for the Top 20 companies in several ways, not least of all due to the exchange rate which meant an over 10 percent hit right away in rupee earnings, for exporters,” said Pradeep Gupta, Publisher, CyberMedia group. “Yet the fact that the Top 20-especially the exporters-still grew as much as they did speaks volumes about their robustness, domain expertise and maturity, ” he added.

Another significant variation in FY 08 from the trend in the last few years was inconsistent growth witnessed in the industry. While the number of companies witnessing negative growth jumped from three in FY 07 to 14 in FY 08, establishing a record of sorts in recent years; the number of companies that recorded three digit growths, also jumped from seven in the previous year to 13 this year.

"This uneven growth means companies that have differentiated themselves in some way, in a tough year, began to reap the benefits of that strategy. SAP, Dell and HCL Insys, with the highest growth in the DQ Top 20, are examples of this,” said Prasanto Kumar Roy, Chief Editor, Dataquest.