Financial Daily from THE HINDU group of publications
Tuesday, Mar 12, 2002
Shine returning to software?
BANGALORE, March. 11
THE domestic software industry is likely to reverse its depressed trend and surge in the next fiscal tracking recovery hopes of the troubled US economy.
A strong drift towards offshore delivery, increased order visibility and some recent order wins indicate that the sector is set to regain its lost shimmer. The sector slipped into uncertainty tracking a slowing US economy as overseas corporates reduced technology spend, squeezing order flows.
``There is a definite upbeat sentiment and we are talking to a lot of companies and the mood is very positive,'' Mr Sanjeev Goswami, software analyst with SSKI Securities said.
That was perhaps best reflected in a recent address to Wipro employees by the Chief Executive Officer, Mr Vivek Paul. Inaugurating the tech-forum, Mr Paul had said that there was a strong interest in offshore business and that was good news.
``The tsunami is behind us, seas are still choppy, but we can look forward to fair weather,'' Mr Paul had said. ``Mr Paul's comment had set the markets on fire,'' Mr Goswami said, adding that such bullish outlook augured well for the sector in the near-term.
``There is positive news on business flows,'' Mr Bhupinder Ahuja, software analyst with Deutsche Banc-Alex Brown said. ``We see a definite trend in volume picking up,'' he added.
While companies such as MphasiS BFL maintain that they would sustain the momentum in client acquisition and volume growth, several analysts believe that business visibility of mid-cap companies have improved considerably.
However, pricing continues to be a concern for Indian software sector. ``Pricing will continue to be impacted,'' Mr Ahuja said. Several IT firms echoed that hiking of rates would not be easy going forward.
``At least top-line growth is ensured, which is good news for the sector. The point of inflexion seems pretty near,'' an analyst with a European brokerage noted.
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