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India to have $30 b share of world IT services market by 2004 -- Goldman Sachs
Our eFE Bureau
India's share of the worldwide IT services market will be worth $30 billion by 2004, as against $5.7 billion in 1999, according to a survey conducted by an arm of Goldman Sachs. In its 197-page survey report about India's place in the global IT services market, the Goldman Sachs Asian technology research team predicts that India will capture a five per cent share of the global IT services market within the next four years. The worldwide spending on IT services in 1999 was $349 billion, which according to the report, will touch the $585 mark by 2004. "Currently India accounts for only 1.6 per cent of the international IT services market. But, in the next four years India's share will grow at a compound annual growth rate of 39 per cent," Anil Tiwari, securities analyst, Goldman Sachs told media persons. He attributes the growth to the vast human resource potential of India which makes it one of the largest pool of the talent available for developing IT applications, in the entire world. The increase in India'sglobal market share will be further facilitated by the spurt in Indian companies for diversifying both in terms of customer and revenue streams; increasing geographic exposure; and evolving best practices."The Indian IT services industry is marching up the value chain and taking on more mission-critical end-to-end solutions for Fortune 1000 clients," Anil said. However, he also cautioned that maintaining this strong growth would be the biggest challenge before Indian companies in the IT services sector. Some of the other major challenges that India will need to gear up to face include devising a road-map for continued flawless execution and minimising the impact of domestic infrastructure and political risk, and slowdown in major global IT spending. "Although the political system looks keen about supporting the IT sector in India, a pitfall like the recent telecom strike could result in lasting damage to worldwide relations," Anil said. Indian companies should also be more careful about facing up to the valuation challenge. "The key companies in the sector will need to focus on profit margins and strong sustainable growth," Anil informed. Given the present framework of the IT sector in the country, Anil said, Goldman Sachs had identified two IT companies that would maintain attractive growth and continue to demonstrate crisp execution. These two companies are Infosys Technologies and HCL Technologies. Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.
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