The Hindu Business Line : Nasscom says IT export target on track for now

With the US financial turmoil looming large over the Indian IT industry, Nasscom on Friday said it is sticking to the export targets for now, but will await the results and guidance announced by IT services companies for quarter-ended September for “clarity” and assessment.

“We are confident that we do not have to do anything at this point.

“We had already factored in the sub-prime impact, and had projected a lower growth rate of 21-24 per cent for FY09. We will have to see how deep things are…We will be keeping a watch. The quarter ended September — when companies announce results and guidance — will be critical as it will help us gauge the extent of exposure and impact,” the Nasscom President Mr Som Mittal, told Business Line.

The apex software association has estimated that the country’s software and services revenue would grow between 21 per cent and 24 per cent during 2008-09 to touch $62-64 billion.

Lower projections

The growth rate projections for FY09 were lower than 28 per cent growth achieved in FY08, as it factored in a possible slowdown in decision-making on new projects. Within the FY09 revenue targets, exports were expected to account for $50 billion with the domestic revenue bringing in another $13 billion. “Close to 70 per cent of the IT spend is on sustaining the current IT systems and application, which is not going to go away. It is the decision-making on new projects that may get delayed,” he said.

Earlier this week, Nasscom had said in a statement that the current situation indicated that impact will be “short term and company specific”.

“The Indian IT-BPO sector is a part of the global ecosystem that has been facing uncertainties in the recent past. This is consequent to the sub-prime crisis, which began last year and many companies that were being directly impacted had prepared for this,” it added.

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