'Mixed' corporate results for IT consulting, software sector: ASSOCHAM

If trends are anything to go by, the early estimates for information technology (IT) consulting and software sector based upon the declared annual corporate results for 2015-16 have been somewhat mixed, according to a just concluded an ASSOCHAM research paper.

"Though there has been a rise in annual growth of revenue or net sales for most firms that have declared their results, viz., Infosys, Mindtree, TCS, Wipro, Zensar Technologies and Sasken Communication Technologies, while the same cannot be said about net profit situation," said an ASSOCHAM research paper titled 'IT sector 2015-16 corporate performance: Indications from early estimates.'

The ASSOCHAM Economic Research Bureau (AERB) had analysed aforementioned six IT consulting and software firms whose performance details indicated that in financial year 2015-16, annual growth in net sales has increased for four firms as compared to growth rate seen in FY 2014-15, whereas the remaining two have witnessed a marginal decline in growth rate.

Interest payments seem to have seen a rise in three firms thereby indicating a probable rise in amounts of total borrowings by these organisations.

"It is disappointing to note that only two out of the six firms analysed have been able to register better net profit annual growth rate in FY2015-16 over FY2014-15," said D.S. Rawat, secretary general of ASSOCHAM, while releasing the findings of the chamber's research paper.

"The domestic IT and software industry needs to work towards a comprehensive digital transformation with a concrete strategy to utilise its strengths and alleviate the challenges," added Rawat.

The ASSOCHAM research paper further noted that future of global technology industry will be shaped by economic forces and adoption of new technologies.

"With rapidly-evolving technologies, changing consumer preferences and often times competing channels, many organisations might struggle with how to transform internally to meet challenges," it added.

Besides, government's clear policies and economic growth agendas particularly - Digital India and Make in India would further help drive a vision of technology-enabled India thereby making it an excellent business delivery centre for IT industry.