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Global headwinds slow down Indian IT industry’s growth

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Bengaluru, Dec 31 : Global headwinds such as macroeconomic factors, currency volatility and disruptive technologies impacted the resilient Indian IT industry in 2016, forcing Nasscom, its apex body, to lower the growth rate for fiscal 2016-17.

“The IT industry is going through a transient phase with global and domestic factors impacting its performance. While the effect of short-term factors may show for a couple of quarters, the worst is behind us,” Nasscom President R. Chandrashekhar told.

The single-digit growth of global software majors like TCS, Infosys, Wipro and HCL for the July-September second quarter made Nasscom revise its industry export revenue guidance to 8-10 per cent ($117-119 billion) in November from 10-12 per cent ($119-121 billion) it projected in February.

The National Association of Software and Services Companies (Nasscom) has, however, maintained the domestic revenue growth at 11-13 per cent to achieve Rs 1,560-1,590 billion ($22.9-23.4 billion) by March 31,2017.

“This year has been an interesting one for the industry owing to various global and domestic factors. Increased adoption of digital technology by consumers, e-commerce and start-ups has driven the industry’s growth in the domestic market,” Chandrashekhar asserted.

Though India accounts for 56 per cent of global sourcing with seven per cent market share of the world’s software and IT services, currency volatility and innovative technologies like artificial intelligence, automation, Internet of Things and machining have disrupted the industry’s traditional products and solutions to enterprises worldwide.

“To stay globally competitive, the industry needs to invest and enhance its digital capabilities. This entails a mix of reskilling, domain and platform capabilities coupled with acquisition-led competencies,” Chandrashekhar maintained.

Recovering from the fallout of the global financial meltdown in 2008-10, the Indian IT-BPM (Business Process Management) industry flourished to grow in double digits (12-14 per cent) on a wider base over the last couple of years, thanks to its adoption of cloud computing, big data, analytics and mobility.

As a result, the industry’s revenue grew 12-13 per cent in the 2015-16 fiscal to $143 billion, including $108 billion from exports, while domestic revenue increased by 10 per cent to Rs 1,41,000 crore.

For the first time in many quarters, IT bellwether Tata Consultancy Services (TCS) reported flat sequential growth for the second quarter, which made its Chief Executive N. Chandrasekaran admit that growing uncertainties in the environment was creating caution among customers and resulted in holdbacks in discretionary spending.

Similarly, Infosys lowered its annual revenue guidance to 8-9 per cent for this fiscal due to uncertain business outlook and currency volatility from 10-11.5 per cent on June 30 and 11.8-13.8 per cent it projected in April.

Unlike its peers TCS and Infosys, Wipro projected flat revenue from its IT services for October-December third quarter due to weak demand and uncertainty in technology spend.

The government’s push towards digitisation for a digital economy and enhancing the ease of doing business through administrative overhaul and tax reforms, however, augured well for the industry.

Looking forward, Chandrashekhar said 2017 would be the year of re-adoption for the industry, with technology disruptions reshaping enterprises and providers focusing on building technology-led platforms that can redefine services delivery.

“Trends like consumerisation of IT, SMAC (social, mobile, analytics and cloud), changing lines of business and new under-penetrated markets will alter the future of the industry.”

Industry hiring also took a beating, with the IT majors deferring recruitment of freshers from campuses, holding back appointments for laterals and postponing joining dates for new techies.

The industry employee base reached 3.7 million, with an addition of 200,000 employees in 2015-16.

“The industry is looking for talent from ‘qualification’ to ‘skill-based’ with greater focus on hiring ‘knowledge and expertise’-based talent,” Chandrashekhar noted.

(This is a part of a series of articles from IANS that look back at the year that was. Fakir Balaji can be contacted at [email protected])

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Xiaomi, Jio top India market

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New Delhi, April 24: Xiaomi continued to lead the Indian smartphone market with 31.1 percent market share while Reliance Jio topped the feature phone market with a massive 35.8 percent share in the first quarter of 2018, a new report has said.

Xiaomi was the leader with 25 per cent market share in Q4 of 2017.

According to Counterpoint’s “Market Monitor” service, Samsung with 26.2 per cent share was second, followed by Vivo at 5.8 per cent share in the smartphone segment.

Driven by the feature phone segment which doubled owing to strong shipments of Reliance JioPhone, India’s overall mobile phone shipments grew 48 per cent (YoY) in Q1 2018.

Honor (Huawei) entered top five smartphone brands for the first time. Honor (146 per cent), Xiaomi (134 per cent) and OnePlus (112 per cent) were the fastest growing smartphone brands.

“Q1 2018 started off with some brands sitting on inventory post the festive season in Q4 2017, which continued throughout the quarter as industry moves to a Full View display portfolio,” Karn Chauhan, Research Analyst, said in a statement.

Furthermore, the quarter was also marked with less than normal smartphone launches as very few brands refreshed their portfolio, except for Xiaomi and Samsung which benefitted from the new launches.

“However, we expect the demand to start picking up from early Q2 2018 onwards, driven by faster replacement rate of existing 2G and 3G smartphone users upgrading to 4G mobile phones,” Chauhan added.

This is the first time that the top five smartphone brands accounted for more than 70 per cent market share in a single quarter.

“Xiaomi and Samsung alone captured 58 per cent of the total smartphone market. Xiaomi’s Redmi Note 5 and 5 Pro were the most popular models for the Chinese brand, whereas Samsung Galaxy J7 NXT and J2 (2017) drove volumes for the Korean vendor,” said Anshika Jain, Research Analyst.

The performance of Chinese brands remained strong, accounting for 57 per cent of the total smartphone market in Q1 2018, up from 53 per cent during Q1 2017.

“The demand for JioPhone continued through Q1 2018 as Reliance Jio’s feature phone market share raced from 0 per cent last year to 36 per cent in Q1 2018. This demand was catalysed by the introduction of a cheaper data plan,” said Tarun Pathak, Associate Director.

China based Transsion Group (the holding group of Tecno, Itel and Infinix) has become the fifth largest player with four per cent market share in Q1 2018 (combined for all three brands).

The race for the fifth position is quite close between Lava, Micromax, Honor, Nokia (HMD) and Lenovo (+Moto) brands.

Itel is the third largest player in the feature phone segment with 17 per cent growth (YoY).

IANS

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Global cues push key indices higher

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SENSEX-

Mumbai, April 24: Broadly positive Asian markets pushed the key Indian equity indices higher during the early morning trade session on Tuesday.

According to market observers, healthy buying in banking, automobile and healthcare stocks also supported the key indices’ upward movement.

Around 9.30 a.m., the wider Nifty50 of the National Stock Exchange (NSE) traded higher by 16 points or 0.15 per cent to 10,600.70 points.

The barometer 30-scrip Sensitive index (Sensex) of the BSE, which opened at 34,491.38 points, traded at 34,597.71 points — up 146.94 points or 0.43 per cent from its previous session’s close.

The Sensex has so far touched a high of 34,604.76 points and a low of 34,465.49 points during the intra-day trade.

The BSE market breadth was bullish with 1,024 advances and 549 declines.

IANS

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Key equity indices provisionally end in green

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Mumbai, April 23: The key Indian equity indices provisionally closed in the green on Monday on the back of healthy buying in consumer durables, healthcare and IT stocks.

However, selling pressure on metal and fast moving consumer goods (FMCG) stocks trimmed gains in the market.

At 3.30 p.m., the wider Nifty50 of the National Stock Exchange (NSE) provisionally closed higher by 20.65 points or 0.20 per cent at 10,584.70 points.

The barometer 30-scrip Sensitive index (Sensex) of the BSE, which opened at 34,493.69 points, closed at 34,450.77 points (3.30 p.m.) — up 35.19 points or 0.10 per cent — from its previous session’s close.

The Sensex touched a high of 34,663.95 points and a low of 34,259.27 during the intra-day trade.

The BSE market breadth was bullish with 1,399 advances and 1,284 declines.

On Monday, the major gainers on the BSE were IndusInd Bank, Mahindra and Mahindra, Sun Pharma, Asian Paints and Yes Bank while HDFC Bank, Tata Motors (DVR), Coal India, Hero MotoCorp and ICICI Bank were among the major losers.

On NSE, the top gainers were IndusInd Bank, Mahindra and Mahindra and BPCL. The major losers were Hindalco Industries, Indiabulls Housing Finance and UPL.

On Friday, negative global cues such as high crude oil prices, along with a weak rupee and heavy selling pressure in banking stocks subdued the key Indian equity markets.

The Nifty50 closed at 10,564.05 points on Friday, down 1.25 points or 0.01 per cent from its previous close and the Sensex closed at 34,415.58 points, down 11.71 points or 0.03 per cent.

IANS

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