Industry Profile

Overview
The IT & ITes sector includes IT services, engineering design and R&D services, ITES (IT-
enabled services) or BPO and hardare!
Toda" IT and ITeS sectors lead the econo#ic groth in ter#s o$ e#%lo"#ent, e&%ort
%ro#otion, revenue generation and standards o$ living! 's %er ('SS)O* esti#ates, IT+ITeS
sector (e&cluding hardare) revenues are esti#ated at ,SD -.!/ billion in 01 2344-425 and
the industr" is e&%ected to gro b" 46 %er cent during 01 2342-47!
The IT+ITeS sector has led to e#%lo"#ent o%%ortunities, both direct and indirect, o$ nearl"
2!- #illion and around -!6 #illion res%ectivel"! This groth is e&%ected to increase to #ore
than 48 #illion (direct and indirect) b" 2349 and to around 73 #illion b" 2373!
The #ar:et si;e o$ the industr" is e&%ected to rise to ,SD 229 billion b" 2323 considering
India<s co#%etitive %osition, groing de#and $or e&%orts, =overn#ent %olic" su%%ort, and
increasing global $oot%rint!
IT+ITeS industr" has led India<s econo#ic groth and this sector<s contribution to the national
=DP has risen $ro# 4!2 %er cent in 466.-6- to an esti#ated .!9 %er cent in 2344-42!
IT+ITES industries are highl" locali;ed and clustered in seven cities as o$ toda"! These are>
Bangalore, ?"derabad, )hennai, =urgaon+(oida+(e Delhi, @ol:ata, *u#bai and Pune!
In$rastructure li#its and scarcit" o$ land has recentl" led to e&%ansion to neer %laces li:e
'h#edabad, Bhubaneshar, )handigarh, )oi#batore, Aai%ur, @ochi, *adurai, *angalore,
*"sore and Trivandru#!
Introduction to the terms:
In$or#ation Technolog" (IT) is de$ined as the design, develo%#ent, i#%le#entation and
#anage#ent o$ co#%uter-based in$or#ation s"ste#s, %articularl" so$tare a%%lications and
co#%uter hardare! Toda", it has gron to cover #ost as%ects o$ co#%uting and technolog"!
The largest $ir#s globall" include IB*, ?P, Dell and *icroso$t!
The In$or#ation Technolog"-Enabled Services (ITES) industr" %rovides services that are
delivered over teleco# or data netor: to a range o$ e&ternal business areas! E&a#%les o$
such business %rocess outsourcing (BPO) include custo#er service, eb-content
develo%#ent, bac: o$$ice #anage#ent and netor: consultanc" etc!
Factors leading to growth in the IT/ITes sector are:
Bo o%erating costs and ta& advantage!
0avorable govern#ent %olicies!
Technicall" Cuali$ied %ersonnel easil" available in the countr"!
Ra%id ado%tion o$ IT technologies in #aDor sectors as Teleco#, *anu$acturing and
B0SI!
Strong groth in e&%ort de#and $ro# ne verticals and non-traditional sectors as
%ublic sector, #edia and utilities!
,se o$ ne and e#erging technologies such as cloud co#%uting!
SEE as groth drivers5 as #ore o$ SEEs are no being set u% in Tier II cities and
about 87 ne tier II+III cities are e#erging as IT deliver" locations!
'll these $actors have given IT+ITES industr" in India a strong co#%etitive %osition ith high
#ar:et share!
Employment trends
's %er the Econo#ic Surve" 2344-42, the IT+ITeS industries has added .!6/ la:h Dobs in one
"ear, in the %eriod ending Se%te#ber 2344!
'ccording to ('SS)O*, e#%lo"ee base in the rural areas is e&%ected to increase b" over 43
ti#es b" 2347-48, co#%ared to 9333 in 2336-43!
'ccording to a custo#er %oll conducted b" Boo; and )o, India is the #ost %re$erred
destination $or engineering o$$shoring, hich are encouraging $oreign co#%anies to o$$shore
co#%lete %roduct res%onsibilit" to Indian ITeS co#%anies
?"derabad is $ast beco#ing the IT+ITes hub o$ India ith ne %la"ers han:ering to
get a $oothold here, and e&isting %la"ers continuing to hire aggressivel"! Barge co#%anies
such as In$os"s, T)S, =en%act, Deloitte, 0aceboo:, Ban: o$ '#erica, Tho#son Reuters,
'#a;on, =oogle, )ogni;ant, 0ran:lin Te#%leton a#ong others, are groing their %resence
in the state! 'ccording to 'ndhra Pradesh =overn#ent<s esti#ates, the total IT+ITeS sector
hiring $or 2342-47 could be at about 93,333 %ro$essionals!
Internet trends
*ore recentl", online retailing, cloud co#%uting and e-co##erce are leading to ra%id
groth in the IT industr"! Online sho%%ing is $ast gaining %o%ularit" ith the e#ergence o$
internet retailing and e-co##erce!
'ccording to the Internet and *obile 'ssociation o$ India (I'*'I) the nu#ber o$
Internet users in the countr" is #ore than 424 #illion, out o$ hich 4. #illion are online
sho%%ers! Increasing internet %enetration and a$$ordabilit" $or %ersonal co#%uters has led to
this ra%id nu#bers, and these are e&%ected to tri%le b" 2349!
'ccording to I'*'I, online sales o$ branded a%%arel al#ost doubled in volu#e to
8!66 #illion %ieces during '%ril 2342, as against 2!98 #illion in the sa#e #onth a "ear ago!
'lso, E-tic:eting continued to gro ith irctc!co# recording 9!9/ #illion boo:ings in '%ril,
2342, as co#%ared to 2!2/ #illion boo:ings in '%ril 2344!
Government Initiatives
In the tel$th 0ive 1ear Plan (2342-4.), the De%art#ent o$ In$or#ation Technolog"
%ro%oses to strengthen and e&tend the e&isting core in$rastructure %roDects to %rovide #ore
hori;ontal connectivit", build redundanc" connectivit", underta:e energ" audits o$ State Data
)enters (SD)s) etc! The core in$rastructure including $iber o%tic based connectivit" ill be
leveraged and additional 493,333 )o##on Service )enters ()S)s) ill be setu% to create the
right =overnance and service deliver" ecos"ste# at the Pancha"ats
Company Profile
In$os"s Bi#ited (('SD'F> I(01) as started in 46-4 b" seven %eo%le ith G293!
Toda", e are a global leader in the <ne&t generation< o$ IT and consulting ith revenues o$
G/!79 billion (BT* F4-0142)! In$os"s de$ines, designs and delivers technolog"-enabled
business solutions that hel% =lobal 2333 co#%anies in in a 0lat Horld! In$os"s also
%rovides a co#%lete range o$ services b" leveraging their do#ain and business e&%ertise and
strategic alliances ith leading technolog" %roviders!
In$os"s< o$$erings s%an business and technolog" consulting, a%%lication services,
s"ste#s integration, %roduct engineering, custo# so$tare develo%#ent, #aintenance, re-
engineering, inde%endent testing and validation services, IT in$rastructure services and
business %rocess outsourcing! In$os"s %ioneered the =lobal Deliver" *odel (=D*), hich
e#erged as a disru%tive $orce in the industr" leading to the rise o$ o$$shore outsourcing! The
=D* is based on the %rinci%le o$ ta:ing or: to the location here the best talent is
available, here it #a:es the best econo#ic sense, ith the least a#ount o$ acce%table ris:!
In$os"s ta:es %ride in building strategic long-ter# client relationshi%s! Over 6.I o$
their revenues co#e $ro# e&isting custo#ers! In$os"s has global %resence through its 93
o$$ices and develo%#ent centers s%read across India, )hina, 'ustralia, the );ech Re%ublic,
Poland, the ,@, )anada and Aa%an! In$os"s and its subsidiaries have 477,9/3 e#%lo"ees as
on Aune 73, 2344! In$os"sJs 0inacle is ,niversal ban:ing solution that caters to core ban:ing,
e-ban:ing, Isla#ic ban:ing, treasur", ealth #anage#ent and )R* reCuire#ents o$ retail,
cor%orate and global ban:s! It is used b" over 43/ ban:s across /4countries,na#el" ,@ ,S,
)hina, Taian, ?ong @ong, India, Ei#babe, Saudi 'rabia, *aldives, (e%al, etc!
So$tare Engineering & Technolog" Babs (SET Babs) is the research ar# o$ In$os"s!
It is at the $ore$ront o$ antici%ating and sha%ing the evolution o$ technolog" and its i#%act on
business! In$os"s SET Babs underta:es targeted R&D to address "our business %roble#s! Our
researchers are engaged in cutting-edge research to share insights ith clients! He $ocus on
research areas such as *alleable 'rchitecture, Pervasive 'ccess, 0le&ible Processes and
Personali;ed In$or#ation! These areas constitute the $unda#ental business technolog"
co#%onents o$ a %rogressive, in$or#ation-centered enter%rise!
nnual !eport of Infosys for the year "#$"%"#$&>
*ar <42 *ar <47
42 #ths 42 #ths
Inco#e
Sales Turnover 77,.78!33 83,792!33
E&cise Dut" 3!33 3!33
(et Sales 77,.78!33 83,792!33
Other Inco#e 4,638!33 2,7/9!33
Stoc: 'dDust#ents 3!33 3!33
Total Inco#e 79,/7-!33 82,.4.!33
E&%enditure
Ra *aterials 2-!33 26!33
Poer & 0uel )ost 3!33 3!33
E#%lo"ee )ost 4-,78-!33 22,9/9!33
Other *anu$acturing E&%enses 4,8.2!33 2,2-3!33
Selling and 'd#in E&%enses 2,-9-!33 2,349!33
*iscellaneous E&%enses 734!33 4,673!33
Preo%erative E&% )a%italised 3!33 3!33
Total E&%enses 27,33.!33 2-,-46!33
*ar <42 *ar <47
42 #ths 42 #ths
O%erating Pro$it 43,.2.!33 44,977!33
PBDIT 42,/74!33 47,-6-!33
Interest 8!33 3!33
PBDT 42,/2.!33 47,-6-!33
De%reciation 62-!33 4,366!33
Other Hritten O$$ 3!33 3!33
Pro$it Be$ore Ta& 44,/66!33 42,.66!33
E&tra-ordinar" ite#s 3!33 3!33
PBT (Post E&tra-ord Ite#s) 44,/66!33 42,.66!33
Ta& 7,7/.!33 7,7.3!33
Re%orted (et Pro$it -,772!33 6,826!33
*inorit" Interest 3!33 3!33
Share O$ P+B O$ 'ssociates 3!33 3!33
(et P+B '$ter *inorit" Interest & Share O$ 'ssociates -,772!33 6,826!33
Total Kalue 'ddition 22,6.6!33 2-,.63!33
Pre$erence Dividend 3!33 3!33
ECuit" Dividend 2,/--!33 2,76.!33
)or%orate Dividend Ta& 87-!33 837!33
Per share data (annualised)
Shares in issue (la:hs) 9,.82!73 9,.82!7/
Earnings Per Share (Rs) 489!43 4/8!23
ECuit" Dividend (I) 3!33 3!33
Boo: Kalue (Rs) 989!/8 //4!/8
'everage Calculation>

Descri%tion *ar<42 *ar<47 I Di$$erence
Sales 77,.78!33 83,792!33 4/!83
Earnings Be$ore Interest Ta& 44,.37!33 42,.66!33 -!9/
Earnings Per Share (Rs) 489!4 4/8!2 44!/7

Degree o$ O%erational Beverage L )hange in EBIT + )hange in Sales
DOBL 3!922427
Degree o$ 0inancial Beverage L )hange in EPS + )hange in EBIT
D0BL 4!79-768
Degree o$ )o#bined Beverage L )hange in EPS + )hange in Sales
D)BL 3!.36286

(ustification>
In$os"s have re%aid the debts got $ro# the "ear 2342 in the ne&t $inancial "ear 2347
and thus the" donJt have an" debts in 2347 but the" have de%reciation in their account!
In$os"s have $inancial leverage (4!79-768) #ore than their o%erational leverage (3!922427),
thus the co#bined leverage (3!.36286) is i#%roved