IT never rains, it pours. If the currency problems weren't bad enough, the country's IT sector could now have to bear the impact of the sub-prime problem as well. Given that 24-47 per cent of the turnover of the industry's top performers comes from financial services, there is a possibility this could get affected by global financial firms going under or reducing business due to sub-prime borrowers defaulting. So far, though, broking house CLSA's Asia-Pacific division says the signs haven't been too bad with the growth from financial services picking up for most IT firms "" they grew 12.6 per cent quarter-on-quarter for TCS as compared to 4 per cent in the March quarter, 13 per cent for Cognizant (7 per cent last quarter), 9.3 per cent for Wipro (8.8 per cent). But given how the situation is yet to fully unfold, it's clearly something to keep in mind. CLSA also does an analysis of the effective tax rate for the industry, now the STPI tax benefit is set to expire in a year. Since the SEZ benefit will apply only to new firms, and will be staggered "" 100 per cent for the first 5 years, 50 per cent for the next 5 and so on "" CLSA estimates the effective tax rate will go up from 12 per cent last year to 21.5 in 2009-10, fall to 18.1 the next year and finally settle at 23.9 in 2015-16.
