May 2003
IT companies get a reality check
| |
Nilekani: growing the business
volumes of Infosys has not been a
problem but margins have been
put under pressure |
The Indian stock markets fundamentally reassessed Indian
information technology stocks last month. Jolted by a sharp fall in
profit margins and a profit warning for the next fiscal year from
Infosys, the bellwether for Indian IT companies, the stock sank.
The market capitalization of Indian IT stocks has shrunk by over
a third this year to Rs662.8 billion ($14 billion) on April 24,
tipping the 30-share Bombay Stock Exchange Sensex to a six-month
low. That is likely to lead to the postponement of an initial
public offering by Tata Consultancy Services, the biggest exporter
of Indian software services, which has been trying to list for over
a year now.
The heady growth of the Indian IT industry in the late 1990s
attracted a large chunk of the $15.9 billion that foreign...
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