Belying predictions by doomsayers, the Indian IT industry has bounced back in the first quarter of FY10. After witnessing one of its worst years in FY09, the IT business seems to have attained some stability.
Tata Consultancy Services (TCS) saw a year-over-year growth of 12 per cent in revenues from Rs 6,454.62 crore in FY09 to Rs 7,232.54 in FY10, and an 18.8 per cent growth in its profit after tax figures. According to S. Mahalingam, chief finance officer and executive director of TCS, the performance of the company was largely due to maintaining rigour in pricing and better employee and cost management.
Wipro, another IT major, has also posted an increase of 10 per cent in revenues to Rs 4,825 crores in Q1. "We are starting to see the first sign of stability in the business as ramp down starts to taper off and volumes start to stabilise," said Azim Premji, chairman of Wipro, in a statement.
On the other hand, Tech Mahindra saw its operating profits dip from Rs 2,868 crore to Rs 2,805 crore. But this is due to the Rs 57.10 crore interest burden on Satyam buyout borrowings. From here, the wait starts for the results of Q2 of FY10 to see how fast the industry improves.
(This story was published in Businessworld Issue Dated 03-08-2009)