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February 26, 2000

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Sector report: Software

Dun and Bradstreet India

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Key players
Infosys Technologies, Wipro, NIIT, Tata Infotech, Satyam Computer, Aptech, BFL Software, CMC, DSQ Software, HCL Infosystems, Mastek Software, Pentafour Software, PSI Data Systems.

Background

  • According to NASSCOM, the Indian software industry is estimated to touch Rs 245 billion in 1999-2000, representing a growth of over 54 per cent over the previous year.
  • The compound annual growth rate of revenues generated by the Indian software industry over the past five years has been 56.3 per cent.
  • Software exports are estimated to touch Rs 172 billion in 1999-2000 compared with Rs 109 billion in the previous year.
  • Exports to Organisation for Economic Cooperation and Development countries (USA, Japan, UK, Germany, France and Italy) account for around 80 per cent of India's total software exports.
  • Internet and e-commerce related software and service exports are expected to contribute around $ 340 million of the estimated $ 3.9 billion software exports in 1999-00. These are estimated to cross $ 1 billion by the year 2002.

Expectations from the Budget

  • The industry expects the government to increase the upper limit of foreign institutional investment in infotech companies to at least 40 per cent from 30 per cent. However, this demand is unlikely to be met immediately given the high valuations that infotech companies command in the currently booming stock market.
  • The software industry may face some tax (such as a tax on export earnings or a software service tax) in the Budget given that it has attained a level of maturity which enables it to sustain taxation.
  • The limit on blanket approval for overseas acquisitions may be raised further.

ALSO SEE:

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Fiscal report card

SECTOR ANALYSIS:




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