IT-BPO sector set to grow 11% in 2012-13: Nasscom

The National Association of Software and Services Companies (Nasscom) has said the information technology (IT) and business process outsourcing (BPO) sector would meet the lower end of its growth expectation for this financial year, owing to the currency volatility, low growth for global in-house centres and differentiated growth for various players.

Nasscom had given a growth guidance of 11-14 per cent at the beginning of this year. It has now said the industry would record growth of 11 per cent and revenue of $75-77 billion. The estimates are based on analysis of Indian listed companies, multinationals, global in-house centres and various industry sectors such as IT services, BPOs, engineering, research & development and products.

Nasscom president Som Mittal said the economic outlook continued to be uncertain. “You have to see the growth guidance in the light of challenges such as delayed decisions and low visibility. Each company has a different story, a different growth rate and slowing of some of the select verticals. As an industry, we have been under-invested in verticals. We have seen faster growth in verticals like retail and healthcare,” he said. Nasscom said remote infrastructure management, BPO and testing were the growth drivers.
 

FUTURE PLAN

• Nasscom to set a committee to look for successor of Som Mittal
• Mittal to continue for a year as Nasscom president 
• Nasscom also sets up a committee under NRN Murthy to look into infrastructural needs of the industry for future opportunities

The 11 per cent growth target also reflects the hurdles some of the top IT services firms have been facing. The top four-five providers account for 40-45 per cent of overall export revenue. Infosys gave a revenue guidance of just five per cent for this financial year, while Wipro continued to grow at one to two per cent on a quarterly basis.

N Chandrasekaran, chairman of Nasscom and chief executive and managing director of TCS, said companies were investing in new technology and domain solutions. “As we crossed the $100-billion mark last year, we still have enough opportunities to make the industry double its size and to be able to do so, we have set up a committee under N R N Murthy,” he said.

Despite the challenges the sector has seen through the year, Mittal said he was confident the Indian outsourcing model would grow.

Sudin Apte, principal analyst and chief executive, Offshore Insights, said, “We had maintained the industry would manage to grow eight to 10 per cent for FY13. But this is the average for the overall industry. Individually, some companies would do better. The good news is 2013 and 2014 seem better than this year.”