...but they ain’t worried! It’s competency & quality that promise the future for Indian IT giants; not ‘luck’!
You might have heard a dozen times about the (in)famous business magnate Martha Stewart, the once stock-broker and now a well-publicised television host and magazine publisher. But what you probably never heard about her was how she made money while in prison. Yes, her personal fortune struck the billion dollar gong (with Martha Stewart Living Omnimedia’s stock price rising by 90%) during her 5-months stint at West Virginia’s Federal Prison in 2004! So what about her? Well, in the past four years (since her release), she’s lost about 70% of her wealth; indeed, better behind bars! But wait, that was her, and we doubt if she had anything to do with IT Services (or India, for that matter!). And we also doubt if entrepreneurs in the Indian IT Services have even a dime-worth of ‘jail’ luck! Take for instance, Ramalinga Raju, the founder of India’s 4th largest IT Services firm, Satyam Computers. Today, he is behind bars (pleading for a bailout), and is in ‘no way’ ammasing great personal wealth! Then there is the 3rd largest flag hoisted atop the Indian IT fort – Wipro, which was banned from dealing with the World Bank over allegations of “improper payments.” Yes, at this perplexing crossroads, the pertinent question which strikes the conscious remains – was our ‘so-considered’ mega-competence in the IT Services field just a myth, with ‘titans’ of the trade proving our ultimate shame? Or will the vanguards of the Indian IT brigade, protect its citadel of glory, far into the 21st century?
Instilling confidence, Rob Enderle, Principal Analyst, Enderle Group tries his bit as he asserts, “Just because one firm [Satyam] turned out to be rotten does not mean that the entire sector is a basket of rotten apples.” But doubting Thomases need more, and here’s some proof: while on one hand the big names mentioned above have seen their shares tumbling at the bourses, the other biggest three Indian IT Services companies (Infosys, TCS and HCL) have managed to maintain a steady stock price and investor confidence even after the Satyam scam broke out in the first week of January. Even their financial health (as per the Q3, FY2009 results) paints an encouraging picture, with the top three reporting considerably increased profit margins – Infosys (net profits of Rs.16.41 billion, an increase of 31.4% over Q3, FY2008), TCS (Rs.13.53 billion, 7.7%) & Wipro (Rs.9.78 billion, 11.3%).
You might have heard a dozen times about the (in)famous business magnate Martha Stewart, the once stock-broker and now a well-publicised television host and magazine publisher. But what you probably never heard about her was how she made money while in prison. Yes, her personal fortune struck the billion dollar gong (with Martha Stewart Living Omnimedia’s stock price rising by 90%) during her 5-months stint at West Virginia’s Federal Prison in 2004! So what about her? Well, in the past four years (since her release), she’s lost about 70% of her wealth; indeed, better behind bars! But wait, that was her, and we doubt if she had anything to do with IT Services (or India, for that matter!). And we also doubt if entrepreneurs in the Indian IT Services have even a dime-worth of ‘jail’ luck! Take for instance, Ramalinga Raju, the founder of India’s 4th largest IT Services firm, Satyam Computers. Today, he is behind bars (pleading for a bailout), and is in ‘no way’ ammasing great personal wealth! Then there is the 3rd largest flag hoisted atop the Indian IT fort – Wipro, which was banned from dealing with the World Bank over allegations of “improper payments.” Yes, at this perplexing crossroads, the pertinent question which strikes the conscious remains – was our ‘so-considered’ mega-competence in the IT Services field just a myth, with ‘titans’ of the trade proving our ultimate shame? Or will the vanguards of the Indian IT brigade, protect its citadel of glory, far into the 21st century?
Instilling confidence, Rob Enderle, Principal Analyst, Enderle Group tries his bit as he asserts, “Just because one firm [Satyam] turned out to be rotten does not mean that the entire sector is a basket of rotten apples.” But doubting Thomases need more, and here’s some proof: while on one hand the big names mentioned above have seen their shares tumbling at the bourses, the other biggest three Indian IT Services companies (Infosys, TCS and HCL) have managed to maintain a steady stock price and investor confidence even after the Satyam scam broke out in the first week of January. Even their financial health (as per the Q3, FY2009 results) paints an encouraging picture, with the top three reporting considerably increased profit margins – Infosys (net profits of Rs.16.41 billion, an increase of 31.4% over Q3, FY2008), TCS (Rs.13.53 billion, 7.7%) & Wipro (Rs.9.78 billion, 11.3%).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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