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IT INDUSTRY Submitted By:
Kanika Anand
Lipi Agarwal
Priyanjana Ghatak
Swati Singh
Varun Sharma
Vikas Sharma
Vipin Khandelwal
Research Details
Research Objectives:
Finding out the Reasons & Impact of Rupee appreciation/Depreciation on IT
Industry, to discuss what all positive traits as well as negative traits did Rupee
Appreciation/Depreciation had on IT Industry, steps taken by IT Industry against
Rupee Appreciation/Depreciation.
Data Collection Method: Secondary Data
Methodology: We have compared the revenue generated by IT Industry in
various years so as to do the comparisons. This actually helped us to understand
that how much IT Industry has lost after Rupee Appreciation.
Overview of Indian IT Industry
The IT Industry has grown from a mere US $ 150 million in 1991-92 to a
staggering US $ 5.7 billion 1999-2000.
Domestic software
Market 490 670 920 1250 1700 2450
Indian Software
Industry 1224 1755 2670 3900 5700 8750
Projected Revenues - 2008
($ US billion)
Exports of $50 billion in 2008
India Subtotal
India Centric Domestic Total 1998
Based (International)
Software
8 2 10 9.5** 19.5 0.6
Products
IT-enabled
15 2 17 2 19 0.4
Service
E-business 4 1 5 5 10 0.2
Total 50 12 62 25 87 3.3
Currency Appreciation
India's outstanding economic growth has created a large domestic market that
offers promising opportunities for foreign companies. Moreover, the country's
rising competitiveness in many sectors has made it an attractive export base.
These factors have boosted FDI inflows into the country. For example, in
2006-07, FDI amounted to around US $16bn, almost three times the previous
year's figure. More than half of these inflows arrived in the final four months
of the fiscal year (December 2006-March 2007).
External Commercial Borrowings (ECBs)
of 33%. The flood of borrowed money is likely to grow in 2007. In the first
three months of the year, Indian companies have notified the RBI of their
Indians settled in other countries have also been a major source of capital
origin is part of the explanation for this, the attractive interest rates offered on
such deposits has also provided a powerful incentive. In 2006-07, NRI deposits
amounted to US $3.8bn, a 35% increase over the previous year; the outstanding
source of foreign-exchange inflows has been remittances from the huge number
The rupee, which rose by over 12 per cent against the dollar this year,
has severely affected the IT companies.
Share of the Top 20 Exporters Dropped,
reversing a Trend of many Years
Comparative analysis
• Infosys managed to maintain the operating margin by increasing its per employee
• It managed to increase rates, both from existing clients and new clients.
a higher percentage to its revenue increased the offshore component in the services
• Most large companies have delivered on the operating margins, and absolute net
• FY08 has been a year in which resilience of this industry was tested. On many
increases, they have actually delivered better than the previous year.
By Numbers
The IT services exports from India grew 25.7% in FY08 to reach
Rs.105684 crore in dollar terms, its size stood at $32.9bn, up 39.9%
from FY07’s export of $23.5bn. This does not include BPO revenue
but includes all other areas: products, outsourced product
development, engineering services, and consulting.
The top 20 exporters too grew at the same rate, 25.8% and clocking a
combined revenue of Rs. 101218 crore ($25bn) or 76% of total IT
export revenue from India.
Business by Top IT Players
Top 20 IT Companies and there
Comparative Revenue Analysis
The Top 20 Exporters
The employees had started feeling the pinch in the form of lesser
salaries and lesser recruitment.