Software exports may exceed Rs. 40,000 cr.

NEW DELHI, JUNE 8. Amid ongoing slowdown in the IT sector, the National Association of Software and Services Companies (Nasscom) today expressed confidence that the software exports from India would exceed Rs. 40,000 crores in the current financial year, registering a growth of about 43 per cent.

"Going by the performance of top 25 IT companies constituting 65 per cent of software exports during the last quarter, we expect that the export revenues will exceed the Rs. 40,000-crore mark this year," the Nasscom Chairman, Mr. Phiroz Vandrevala, told PTI.

The figures are based on the assumption that last quarter (January-March) of 2000-01 had recorded a revenue of Rs. 9,000 crores which was the highest in the history for any quarter.

"Assuming that industry continues the pace achieved during the last quarter, the export earnings should touch Rs. 36,000 crores during the current financial year besides about Rs. 4,000 crores coming from IT enabled services," Mr. Vandrevala said. He said this performance would translate into a growth rate of about 43 per cent.

At present the top 25 IT companies account for 65 per cent of software exports and top 20 for 60 per cent, he added.

He said the margins might come under pressure this year due to worldwide economic slowdown although the decline would not be significant over a short period.

Mr. Vandrevala said the margins were now to the tune of 26 to 32 per cent and were not sustainable on a long term basis.

"Over the next ten years, there is bound to be a correction with respect to the margins that would slowly come down in the face of increasing competition," he said adding that mismatch of demand and supply in the last few years had given abnormally high margins to the IT industry.

The Nasscom had earlier taken a stand that a downward revision of the estimates due to slowdown would still be higher than the CAGR of 30 per cent required to achieve the export target of $50 billion in 2008 as estimated by McKinsey.

It had said that the focus of the industry on markets other than the U.S. as well as a picking up of the U.S. economy later in the year, could help the industry achieve its projected target for the year.

Mr. Vandrevala said India's software exports in 2000-01 were estimated to have crossed Rs. 28,500 crores ($6.2 billion), a jump of over 55 per cent over the $4 billion achieved in the previous year.

- PTI

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