Strong Q3 show: Nasscom says no need to revise export target

Software companies body Nasscom has ruled out revising upwards its 12-14 per cent export growth projection set for this fiscal on more-than-expected show by the industry so far and especially in their Q3 earnings, wherein all leading players have beaten street estimates.     

“No, we are not planning to revise our growth forecast set by us earlier this financial year when we pegged annual growth at 12-14 per cent,” new Nasscom president R Chandrashekhar told PTI here over the weekend on the sidelines of a function.     

The National Association of Software and Services Companies, or Nasscom, sets its annual growth guidance in February and for the current fiscal it had set 12-14 per cent growth pegging export revenue at $87 billion this financial year.

“There is no need to revise the guidance now, even though growth so far has been better than expected as we have one more quarter to go,” explained the former top bureaucrat who headed the Telecom Commission as chairman and telecom department as the secretary before his retirement last year.     It can be noted that all the biggest four software exporters — TCS, Infosys, Wipro and HCL Tech — have beaten analysts projections with robust Q3 numbers.     

While the largest player Tata Consultancy Services stumped the Street with a 50 per cent spike in net Rs 5,313 crore and a 15.1 per cent rise on a quarterly basis, the second largest player Infosys logged in a net profit of Rs 2,875 crore on sales of Rs 13,026 crore for the three months to December both much above the street estimates.     

The NR Narayana Murthy-run company also increased its full-year guidance to 11.5-12 per cent from its earlier estimate of 9-10 per cent, something the company was doing the opposite for quite sometime.     

TCS reported sales of Rs 21,294 crore, an increase of 32.5 per cent year-on-year and 1.5 per cent quarter on quarter and increased its hiring target for the year by 5,000 from 50,000 employees.

The third largest player Wipro too reported better than expected number with a full 28 per cent year-on-year growth at Rs 1,932 crore on a 19 per cent annual increase in revenues to Rs 10,992 crore, while HCL Tech logged in net profit of Rs 1,496 crore, up 5.7 per cent sequentially on revenue of Rs 8,184 crore. When asked whether the growth deceleration in China could impact the prospects of domestic software industry, Chandrashekhar answered in the negative saying the revenue from the world’s second largest economy was not that big.

However, he said its heartening that the US and the European economies are improving, which together account for close to 90 per cent of the revenues of the close to $110 billion domestic software industry.

In FY'13, software exports grew over 10% to $75.8 billion, slightly lower than expected as corporations in its biggest markets cut back on IT spending due to global uncertainty. In FY12, software exports grew 16.3%.