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Infosys records a 9.2% Increase in Net Profit
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With all the talk of the rising dollar, one would have expected Indian Firms with US based clients to experience a shortfall in recorded earnings. Infosys however has recorded a 9.2% rise in quarterly profit. Something that would have pleased Indian Investors to a large extent.
Noida Based HCL Technologies has also recorded at 3.2% rise in quarterly net profit. This despite talks of the US market heading towards a recession.
“While there could be short term challenges due to Global economic uncertainties, we see significant growth opportunities in the Medium to Long Term”, Infosys CEO S. Gopalakrishnan said.
Infosys said that revenue for the current year will grow 19 – 21%.
I’ve heard a lot of talk with respect to the problems that firms like Infy will face in the near future because of the growing cost of labour and hence they will fall in competitiveness. I have my reservation with respect to such arguments. The labour market in India is extremely different from the rest of the World. Supply exceeds demand by a large number. Software companies have hired less than they wanted to but they have still churned out jobs in tens of thousands for the country’s youth. And with strong growth they will always beat the market prices (which will in the medium term, be way below market prices in developed countries) and gain the upper hand in India’s extremely elastic labour market. Add to that the experience of a decade with a reputation for stellar work.
One could argue that Indian Graduates will want to do more than perform systemized processes. However, if you take a look at India’s Engineering Campuses and feel the buzz, most young engineers are more than happy to be employed by the likes of Infosys and Wipro. I have a feeling that there are cultural nuances such as a favourable image, marriage etc attached to that core as well.
Or maybe it’s just the education system that doesn’t make young people enterprising enough.
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Software companies have hired less than they wanted to.
Well, I’m not sure about this. The IT companies have been hiring in abundance and putting all the new hires on benches. Being on bench means a new hire is waiting for a project to be allocated to him to work on. And while he is doing this, he is, effectively not doing any work. A lot of my friends have gone through this.
I however, agree with the statement “maybe it’s just the education system that doesn’t make young people enterprising enough”
The Indian IT Industry is up for a roller-coaster ride. Especially the companies who have been working for the US of A.
Another problem with our industry is that we are totally service oriented. The products which we have come up with can be counted on fingers. Moreover, the successful products are <5. Moreover, these products didn’t see any significant update or new releases at all. (I am deliberately not taking names.)
As about being on bench, well, as far as my knowledge goes, if one abides by the CMM certification, they need to have a certain % of hires on Bench. So, thats alright, till the conversion ratio of OnBench-to-OnProject is increasing, thus increasing the new recruits.
One more thing which I would like to share is, even the professionals who are working on projects, they are being spoon-fed with all the requirements, in such a great detail, that we are just expected to Develop (just plain, simple coding, to be crude)
I personally would not call this Growth.
A correction in the market is already over due.
So, Buckle Up Mates…