‘Sales cycle of IT firms to lengthen, hit growth figures’

Our Markets Bureau

Chennai, Oct 8: The immediate impact of the US attacks on the information technology (IT) sector is that the sales cycle would lengthen which could result in a marginal downward revision of growth figures for many companies for the year 2002-03, says Pioneer ITI vice-president (investments) R Sukumar in the fund house’s quarterly report.

"In the long run, we do not see any significant impact on the prospect of top-tier IT companies in India as we think the problem here is in logistics related to travel, visa etc and not IT budgets," says the fund manager. The bottomline is that technology continues to be a key ingredient of any successful global corporation and in order to cut

costs, these companies would not stop spending on IT,
they would simply outsource it, he added.

In the face of slowing global IT spending, a clear dichotomy has appeared between the top-tier companies and second-rung ones in the domestic IT sector. The quarterly results announced clearly indicate that the second-rung companies, which do not have strong client references and scalable offshore models, have suffered in a challenging environment.

On the other hand, the top-rung companies continued to reap the benefits of the offshoring trend as industry leaders like Infosys, Wipro, Satyam and HCL Tech announced various deals and joint ventures, says Mr Sukumar.