Big IT, BPO names dominating with 40%; rest at 20%

Big IT, BPO names dominating with 40%; rest at 20%

New Delhi: The growth story of Indian IT and ITeS sectors may continue unabated, but it is the big names that are dominating the market with double the growth rate recorded by the rest.

The six IT majors -- TCS, Infosys, Wipro, Satyam, HCL Technologies and Congizant -- along with two BPO giants Genpact and WNS are recording a yearly growth rate of over 40%, according to technology consultancy firm Everest Group.

Apart from these big names, all the other smaller players are struggling at a growth rate of around 20% a year, Everest Group CEO Peter Bendor-Samuel said.

The stronger companies continue to widen horizons and grow profit margins whereas the weaker ones are slowly drifting apart, thus increasing the already existing wide divide, he said.

“The efficient coping mechanisms have helped the bigger companies face the rupee rise till now whereas the smaller players with no such mechanisms are feeling the heat," Samuel added.

The rising rupee would hit the profitability of the bigger players as well, but adverse impact on growth rates would not be seen in the near future, according to the Everest Group.

However, the situation is bad for smaller companies, the spiralling rupee has lead to a drop in their profitability and the growth rate which even to start with was not much, at around 20%.

“The biggest portion of market (IT and ITeS) is in applications segment that has witnessed around 30% annual growth for the last 10 years," Samuel said.

But this success story would see a fall within 18 months, bringing down the growth rate for even the six big IT firms as well as the BPO giants.

“The applications market is making a fast-paced headway towards reaching maturity level, after which a downtrend would begin," Everest Group CEO said in an interview.

According to the research firm, the market is maturing and the industry would be able to retain the quality only with an efficient manpower.

The IT and BPO majors have been more successful in managing talent than the other smaller players, thus helping them produce better quality products and create a ruling position in the market.

“Managing talent is not just an art, there is a lot of expenditure involved which these big companies can afford, but this practice has led to huge salary differentiations in the IT and ITeS job market," Samuel said.