Moneycontrol
Feb 12, 2013 11:29 PM IST | Source: Moneycontrol.com

IT Sector exports seen up 12-14% in FY2014, says Nasscom

India's software services exports are expected to grow 12-14 percent in 2013-14 (April-March), Nasscom (National Association of Software and Services Companies) said on Tuesday.

 
 
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India's software services exports are expected to grow 12-14 percent in 2013-14 (April-March), Nasscom (National Association of Software and Services Companies) said on Tuesday.


The industry body expects the sector to clock 13-15 percent growth in the domestic market, while the IT industry revenue is seen at USD 12-15 billion in FY14.


Nasscom had forecast the IT sector exports to grow 11-14 percent in FY2013. However, it has since revised the guidance and said that the sector will only grow at the lower end of that guidance following a slowdown in decision making and cut in discretionary spends by corporations in US and Europe, key markets for Indian IT companies, amid the global economic downturn.


Most IT companies, including Infosys, which had been underperformer for several quarters, and Tata Consultancy Services reported better-than-expected earnings in the Oct-Dec quarter and have said that growth in 2013-14 will be better than in 2012-13.


US-based Cognizant Technology Solutions this month reported 3 percent quarter-on-quarter revenue growth in Oct-Dec, its fourth quarter, and has guided for at least 17 percent growth in 2013.


"Cognizant has a history of comfortably beating its guidance, suggesting that Indian companies should comfortably deliver our 12-14 percent expectation and there may be upsides if pace of decision making and discretionary spend pick up," Citigroup analysts Surendra Goyal and Rishi Iyer said in a recent report.


The software services exporters have highest exposure to the banking and financial services vertical, and the analysts say that trend from Cognizant and other companies suggests that weakness in the sector is abating.

"The first signs of a pickup in the (IT) sector driven by pent up demand are visible with deal pipelines building up,"said Goyal and Iyer. Infosys and HCL Technologies are Citi's top picks in the sector.

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