Ascent Website URL: Posted On Friday, January 16, 2009 at 12:41:16 PM
Interview: 1) How has the US slowdown impacted Indian mid-cap IT companies?
Beginning Q4, FY 08-09 onwards, majority of the Indian offshore service providers are likely to get hit, including the mid sized ones. The amount of impact will depend on geographic dependencies. Those with larger dependencies on the US region are likely to get impacted harder. Also, those with deeper exposure to the financial and mortgage markets are expected to see their revenue heading southwards for the next couple of quarters.
2) What are the trends you see amongst the key customers for domestic IT companies? What are your views about growing in the slowdown?
For now, majority of our customers are apprehensive, and not necessarily affected. As a result, a few of them have started pushing some of the new projects by 1-3 months.
Recession is not new to the Indian IT industry. There are many companies who grew during the last recession as well. Slowdown helps in many ways to embark and improve upon organisational efficiency levels. This is a good time to streamline your operations and shed out unnecessary flab. This is a time to innovate and come out stronger.
It is also a good time to get close to your customers, understand their pains and draw a mutually beneficial strategy that helps either party. Finally, if you stick to your fundamentals and do the ‘right’ things, you will continue to grow, may be at a slower rate.
3) Do you think the Indian IT sector would be sturdy in years to come? What do you think would be the next big thing in technology?
The fundamentals of the Indian IT sector have not changed. In the mid to long term, the only way to squeeze more operational efficiency is to outsource more, increase adoption of IT in all aspects of the business and to let a trusted partner run the IT operations. IT sector will continue to strengthen and will have robust growth in the years to come.
4) With the Satyam episode, do you think that the Indian IT companies that are in the off shoring business would be affected?
The impact would be in terms of enterprises doing more due diligence. Indian IT firms will not be affected. Companies that have a good track record of corporate governance will receive preference.
5) How are you planning to grow Mindteck and how much of your growth will come through acquisitions?
Mindteck will continue to grow organically for the current year, unless there is a compelling strategic fit.
Our research shows, there still is huge potential in majority of the industries we operate in and we’ve barely scratched the surface. Therefore, we will continue our focus on those industries and drive growth by growing the existing accounts.
Last year, Mindteck made four acquisitions. As a result of that, our services and customer portfolios have increased significantly. This has offered us additional scale and we are trying to leverage it by cross selling our services.
Internally, we have set very high quality parameters for ourselves and we are taking various measures to improve our productivity and overall efficiency.
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