Future tense for IT sector
Mumbai, July 13: The future is tense for the information technology industry if the experience and guidance of industry leader Infosys is something to go by.
Margins will be under pressure because of the currency factor and increments. Rates too are coming down. The company had to renegotiate rates with certain clients though it said that going forward prices would remain stable at these levels.
Ms Amisha Vora, joint managing director, Prabhudas Leeladher says, “margin pressures have been factored in and overall volumes are improving. Infosys shared its optimism about volume growth with the US improving in the next quarter as also for the full year.”
However, the stock was beaten down 3 per cent by investors rather harshly. But says Ms Vora this could be because the stock had an extraordinary performance in the last 10 days. It was up over 7 per cent. So the correction was immediate.
The significant concern signalled by the results is that the industry seems to have lost its cost advantage. For the last several years the Indian industry had a major cost arbitrage advantage said Mr Ambareesh Baliga of Karvy Stock Broking.
This has now eroded due to costs going up and the overseas costs coming down. This is an issue that the industry will have to grapple with, he said.
Post new comment