IT negotiates a tight corner

“The sector has been vehemently focusing on diversifying its geographical risk by reducing its over dependency on US and Europe. The effort has paid-off to some extent with a slight increase in the share of revenues (8.4% in FY06 to 9.8% in FY12) from other emerging geographies like Asia-pacific, Philippines, Africa,” said Sanjay Dhawan, leader —technology, PwC India, adding that this might not be good enough for the sector to completely insulate itself from any turmoil in key markets like US and Europe.

“But the share from emerging geographies is likely to go up further in the coming quarters. And through proper risk mitigation and hedging strategies, the impact of currency fluctuations can be combated to a certain extent,” he added.

December quarter, traditionally the weak period for the $70 billion industry, has turned out to be a surprise for the market, which was expecting a muted performance. Even as concerns on demand from the US and Europe cloud the horizon, top-tier companies have still managed to post healthy numbers and protecting volumes.

Of the pack, only Wipro, bucked the trend with a 1% decline in volume owing to lesser business in the non-discretionary spend and a negative growth of 0.7% sequentially in the US region. Analysts pointed out that Wipro’s ‘poor’ performance is more to do with clients and verticals the company is catering to and less about the overall market

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