Wipro Infotech set to ride domestic IT spend

The domestic Indian IT market is on a roll and Wipro Infotech, which handles the India, Asia-Pacific and Middle East IT business of Wipro Ltd, has positioned itself to make the most of it and go forward.

The Indian IT market (excluding software exports) grew by 11.1 per cent in 2003-04, up sharply on the pervious year's (2002-03) growth of 3.7 per cent. And everyone expects the current year to maintain the momentum.

Wipro Infotech's confidence stems from the growth that it has so far achieved in the current year. In the last quarter (Q2 of 2004-05), the topline grew 41 per cent year-on-year and sequentially 11 per cent. Over the half year the topline has grown by 52 per cent and established an operating margin of 6.2 per cent.

These low margins, compared to what software exporters earn, are explained in good part by the narrow margins in hardware. The inheritor of Wipro's pioneering hardware business, Wipro Infotech is nevertheless laying equal emphasis on services.

The share of services revenue is going up, from 29 per cent in the last quarter of 2003-04 to 38 per cent in the second quarter of the current year (2004-05).

Within services which also includes solutions and consulting, a key area is IT infrastructure outsourcing which is gathering momentum in India.

"We are the leading Indian company operating in this space in India and our main competitors are the MNCs and CMC," says Suresh Vaswani, president of Wipro Infotech.

"We have invested a lot in the Indian market in the last two years and now that the market is expanding, we are uniquely poised to take advantage of it," he adds.

Over the next two to three years there are likely to be three to four deals in the $50-300 million range "and we want to be there. This market is beginning to evolve in India and we want to take over the CII will conduct a seminar on e-governance as part of Bangalore IT.Com 2004 "" Taj West End, 9.45 am.

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