India's Tech Sector Can't Dodge Crisis
India's leading technology companies -- the flagships of the country's economy -- doused hopes that they could escape from a spreading global financial crisis anytime soon.
'Our outlook is cautious in the near term given the extent of strain on the global economy,' said Azim Premji, chairman of Wipro Ltd., in a statement Wednesday. That pessimism comes despite a sharp weakening of the Indian rupee, which helps tech companies that earn most of their revenue overseas.
Under Indian accounting standards, Bangalore-based Wipro said net profit for the July-September period rose to 9.78 billion rupees ($200.2 million) from 8.24 billion rupees in the year-earlier quarter. Revenue rose 36% to 65.20 billion rupees from 47.85 billion rupees a year earlier.
Tata Consultancy Services Ltd., of Mumbai, the country's largest tech company by revenue, said net profit for the July-September period rose to 12.71 billion rupees, up 1.5% from 12.52 billion rupees a year earlier, under Indian accounting standards, a far cry from the 40%-plus growth rates tech companies enjoyed in recent years. Revenue rose 25% from a year earlier to 69.53 billion rupees.
The lackluster outlook helped drag Indian stocks lower Wednesday. The benchmark Sensex index on the Bombay Stock Exchange ended at 10169.90, down 513.49 points, or 4.81%. Tech companies were among the big losers, with Wipro's shares down 5.8% at 279.25 rupees. TCS's shares fell 2.6% to 546.35 rupees, and shares in Infosys Technologies Ltd., the other tech giant, fell 3.5% to 1300.35 rupees. The Bombay Stock Exchange's benchmark index has fallen 49.8% this year.
The downdraft trumped two other developments that should have shored up the market. Norway's sovereign-wealth fund plans to invest $2 billion in India over the next three months, according to Norwegian officials. The Norwegian Pension Fund, commonly called the Oil Fund, is one of the largest pension funds in the world. India's stock-market regulator on Wednesday also restricted short selling -- or bets that stocks will fall -- by foreign funds.
The tech industry has seen its once-skyrocketing earnings growth rates plummet this year as the global credit crisis has put a stranglehold on banks and financial institutions, some of outsourcers' largest clients. Now, as the crisis spreads beyond banks, the companies' earlier optimism that they could regain annual growth rates of 40%-plus has disappeared.
Infosys also recently lowered its outlook for revenue this year in the face of the global crisis. The company now expects to earn about $4.75 billion for the fiscal year ending March 31, 2009, citing the 'current economic situation.' That is down from the $5 billion it said it expected to make in July.
The Bangalore-based company also said that it won't raise its bid for U.K.-based Axon Group PLC, effectively conceding the British consultancy company to rival HCL Technologies Ltd., which had trumped an earlier offer from Infosys.
The slowdown in the industry has forced outsourcing companies, some of the country's most active and prized employers, to slow their hiring. Last week, Hyderabad-based Satyam Computer Services Ltd. said it has cut its recruiting target by a third to 10,000 new hires this year.
A rare bright spot for the companies is the weakening rupee. The nearly 20% drop in the Indian currency this year has helped tech companies add as much as 10% to their profit growth, analysts say. But few say they expect the surprising slide in the rupee to continue. The dollar traded Wednesday at 49.3 rupees.
'Until now, the weak rupee has helped the Indian IT firms, including Wipro, even as dollar revenues have slowed,' says Harit Shah, an analyst at Mumbai-based Angel Broking. But, he said, the rupee is unlikely to depreciate further, and 'with dollar revenue likely to come under more pressure, there will be further strain on growth.'
Niraj Sheth / Vibhuti Agarwal
Wipro Ltd.的董事长Azim Premji周三在一份声明中说，鉴于全球经济疲软的严重程度，该公司对近期前景持谨慎态度。尽管印度卢比汇率的大幅下挫给那些收入大部分来自海外的科技型企业带来了益处，但这种悲观论调仍然不绝于耳。
总部位于孟买的塔塔咨询服务公司(Tata Consultancy Services Ltd.)是印度收入最高的科技型企业。该公司称，依印度会计标准计算，公司今年7-9月这一季度的净利润由上年同期的125.2亿卢比增至127.1亿卢比，增幅1.5%，大大低于印度科技型企业近年来平均高达40%多的利润增长率。当季收入比去年同期增长25%，达到695.3亿卢比。
这一黯淡增长前景周三拖累印度股市走低。孟买证交所基准的Sensex指数周三收于10169.90点，下跌513.49点，跌幅4.81%。科技型企业跌幅居前，Wipro的股价跌5.8%，至279.25卢比。塔塔咨询服务跌2.6%，至546.35卢比，另一科技业巨头Infosys Technologies Ltd.的股价跌3.5%，至1300.35卢比。Sensex指数今年已累计下跌了49.8%。
印度科技业前景黯淡对股市的影响显然超过了另外两个股市利好消息。据挪威官员称，该国主权财富基金挪威退休基金(Norwegian Pension Fund)计划未来三个月内向印度投资20亿美元。这个一般被称做石油基金的投资实体是世界最大的退休基金之一。印度的股市监管部门周三也推出了限制海外基金卖空的措施。
该公司还表示，它将不会调高对英国公司咨询公司Axon Group PLC的收购报价，这实际上是退出了与HCL Technologies Ltd.的这场竞购，因为Infosy较早时提出的报价已经被HCL所压倒。
由于产业增长速度放缓，那些一度是印度最具活力、最受好评企业的外包公司已被迫放慢了人员招聘速度。上周，总部位于海德拉巴的Satyam Computer Services Ltd.表示，它已将今年的新员工招聘目标降至10,000人，削减了三分之一。
Angel Broking驻孟买的分析师哈里特·沙哈(Harit Shah)说，直到目前，卢比疲弱依然在对包括Wipro的印度信息技术企业提供帮助，即便它们的美元收入增速已经放缓。但他认为，卢比不大可能继续贬值，随着美元收入有可能面临更多增长压力，这些企业的增长阻力将会进一步加大。
Niraj Sheth / Vibhuti Agarwal