India's IT exports revenue to grow 9-10% this financial year: Mohandas Pai

The revenue growth of Indian IT exports this financial year is likely to be slower than industry body Nasscom's projection of 10-12 per cent, according to industry veteran T V Mohandas Pai.

"The figures could be lower than what Nasscom has said. But it's still (expected to) be good figures. They forecast 10 to 12 per cent, I would say 9 to 10 per cent is something that could be more reasonable because we already have seen in the first quarter some companies not meeting numbers...Second quarter, some companies going quiet. So, 9 to 10 per cent is reasonable," the former Board member at Infosys told PTI.

A clear picture would emerge after companies announce results for the September quarter, which is generally good for them.

"Europe is beginning to look better. Brexit has hurt the UK. America... We have to see what happens. Some industries are going quiet. So, we need some time, it's too premature to say anything. In 30 days, we will have a clear picture," he added.

"We have to wait to know the real impact of Brexit.It's too premature how companies are going to react. See what's happening is all business in the UK has come down by 10 per cent in rupees because of currency impact. And (the) UK is about 15 per cent of India's exports. So, 15 per cent (10 per cent of 15 per cent) means, it will come down by 1.5 per cent (currency impact). Australian currency is appreciating. We do not know how Euro will behave in the next three months. So, we have to wait. It's too uncertain to take a call," he said.

On what Indian IT companies have to do to improve operational efficiency and cost-cutting, the Chairman of venture capital fund Aarin Capital Partners, and Manipal Global Education, said the sector has to automate and become more productive but added that they are already doing that.

"They have to get into the consolidation mode, buy up smaller companies... Because the industry is consolidating and they must become cost-efficient which is not difficult. I think they are all doing that, people know it, they have been through ups and downs for the last 20 years. It's a mature industry. They have got good management. You have to give them some time," Pai said.

He denied suggestions that the IT services industry is witnessing retrenchment of employees, and stated that it's a "normal attrition".

Pai, a former Chief Financial Officer and HR head at Infosys, termed as "very normal" the increasing number of start-ups shutting shop.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel