Evolution of Nokia
Indian IT: Reduced Growth
According to Business Today, The Indian information technology (IT) industry's growth has halved in 2012/13, going by the latest numbers from industry lobby Nasscom. IT-BPO (business process outsourcing) exports and domestic market revenues are expected to total $108 billion this year, inching just 7 per cent over the previous year. In contrast, the industry grew 15 per cent in 2011/12, albeit from a lower base.
IT exports for 2012/13 are likely to come a touch below body Nasscom's previous projections as a difficult economic climate in the United States and Europe resulted in slower spending on technology by global corporations in 2012.
This factor is affected the all IT companies. The Wipro InfoTech is also progressing in similar manner. The share value of Wipro InfoTech is remained in same range across year.
US Approach to IT Outsourcing
India has around 59% market share in Outsourcing of services. Most of the clients are from US. But in adverse economic conditions US is trying to limit outsourcing of services to other countries. US is in process of lowering their corporate taxes. The proposed bill for the same will limit the business to Indian IT companies.
Rupee slide Impact
A single Dollar was equivalent to 48.6 Rupees on 1st February 2012. The Rupee has fallen from this position to 54.87 on 1st April 2013. This fall of Rupee has impact on all industries. As explained earlier most of the business to Indian IT companies is from abroad. Hence when value of foreign currency increases; it gives more profit to in terms of Indian context. The reason is contract amount paid by foreign companies in terms of dollars and increased value of dollar will generate more rupees value for the same business.
The operating margins of software service exporters tend to go up by 30-35 bps when the rupee falls by 1% against the US dollar. What may limit the positive impact of a weak rupee on margins will be the strategy the companies adopt to
According to Business Today, The Indian information technology (IT) industry's growth has halved in 2012/13, going by the latest numbers from industry lobby Nasscom. IT-BPO (business process outsourcing) exports and domestic market revenues are expected to total $108 billion this year, inching just 7 per cent over the previous year. In contrast, the industry grew 15 per cent in 2011/12, albeit from a lower base.
IT exports for 2012/13 are likely to come a touch below body Nasscom's previous projections as a difficult economic climate in the United States and Europe resulted in slower spending on technology by global corporations in 2012.
This factor is affected the all IT companies. The Wipro InfoTech is also progressing in similar manner. The share value of Wipro InfoTech is remained in same range across year.
US Approach to IT Outsourcing
India has around 59% market share in Outsourcing of services. Most of the clients are from US. But in adverse economic conditions US is trying to limit outsourcing of services to other countries. US is in process of lowering their corporate taxes. The proposed bill for the same will limit the business to Indian IT companies.
Rupee slide Impact
A single Dollar was equivalent to 48.6 Rupees on 1st February 2012. The Rupee has fallen from this position to 54.87 on 1st April 2013. This fall of Rupee has impact on all industries. As explained earlier most of the business to Indian IT companies is from abroad. Hence when value of foreign currency increases; it gives more profit to in terms of Indian context. The reason is contract amount paid by foreign companies in terms of dollars and increased value of dollar will generate more rupees value for the same business.
The operating margins of software service exporters tend to go up by 30-35 bps when the rupee falls by 1% against the US dollar. What may limit the positive impact of a weak rupee on margins will be the strategy the companies adopt to