Fy13 outlook 11-nov-2012 pdf


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Fy13 outlook 11-nov-2012 pdf

  1. 1. Indian IT-BPO industry: Sustaining growth November 12, 2012 Mumbai
  2. 2. What we are covering today • Economic outlook Global Economic and Tech Scenario • Tech spending pattern • Key trends for FY2012 India IT-BPO Industry • Outlook for FY2013 Summary • Key takeaways for the sector
  3. 3. Economic outlook still uncertainGDP growth rates for 2012-2013, % Key Economic Trends 2012 2013P • Global economic growth continues to be a 4.9 cause of concern • 2012 growth estimated at 3.3 percent; 3.9 3.6 down from 3.5 percent projected earlier; For 2013, projected growth of 3.6 percent 3.5 3.5 3.3 • Euro zone crisis, high fiscal deficit and unemployment – key concerns for global corporations • Uncertainty fuelled by currency volatility, inflationary trends and fiscal policies Apr-12 Jul-12 Oct-12 Forecasted inSource: IMF, NASSCOM
  4. 4. Technology adoption – key for efficiencyand growth TECHNOLOGY DRIVERS OUTSOURCING INDUSTRY CHALLENGES TRENDS •Technology reshaping •Return of mega deals- future of every industry increased by 25% in 2012 •Nexus of Forces: Mobile, •Restructuring and re- •Delayed decision cloud, big data, social scoping deals driving making media adoption growing volumes •Low visibility •Asset-light IT strategies •BPO up significantly in push clients to Europe and APAC, ITO •Differentiated growth outsourcing adoption strong •Slowing of select • Customers transition •Key spend areas-cloud, verticals more IT work to annuity- infrastructure, analytics, managed service and platforms relationshipsSource: NASSCOM
  5. 5. Improved hiring and revenue in FH2013 hintat renewed demand uptakeQ-o-Q Revenue* growth (per cent) Industry Structure Foreign service Global in- 5.9% house centres providers 10-15% 20-22% 3.5% 2.1% 1.2% 0.8% Indian service Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 63-65% providers Q-o-Q Employee* growth (per cent) 4.9% Indian/Foreign service providers - Revenue growth and hiring indicate 3.7% 3.4% improved demand scenario 2.2% 1.8% GICs - Currency volatility and global freeze on headcount may lead to lower growth Sep-11 Dec-11 Mar-12 Jun-12 Sep-12* Includes quarterly data for the top public IT-BPO companies constituting ~50% of total industry revenues Source: NASSCOM
  6. 6. Rapid diversification into new geographiesand verticals Geographic break-up Mar-2008 Mar-2012 US Europe Emerging US Europe Emerging 32% 30%Industry growth 13% 16% in emerginggeographies and 55% 54% verticals :~1.4X more than Vertical break-up mature Mar-2008 Mar-2012 segments 20% 14% 19% 12% 21% 36% 27% 35% 38% 17% BFSI Hi-Tech/Telecom BFSI Hi-Tech/Telecom Manufacturing Emerging Manufacturing Emerging * Includes quarterly data for the top public IT-BPO companies constituting ~50% of total industry revenues Source: NASSCOM
  7. 7. Growth in FH2013 more selective than inFY2012 *Size of the bubble represents market size Services FH2013 Verticals FH2013 Geography FH2012 Growth FH2013 (%)
  8. 8. Vibrant domestic market opportunity Government SMBs Large enterprises IT spend > INR 200 billion > INR 336 billion > INR 623 billion (2011) • Demand for ADM, • IT for visibility, sales, • Aligning IT to business TRENDS managed services customer connect goals • Cloud computing, open • Cloud , cluster area source, mobility being network driving IT • Leverage IT for expansion, evaluated adoption competitiveness EXPECTATIONS • Nationwide cloud Enable: • Supply chain optimization, computing platform analytics • Internal transparency • Higher use of RFID, GPS, • Lower overheads, time-to- biometrics • Competitive advantage marketSource: NASSCOM
  9. 9. Transformation and business models – keyto aligning to customer needs Revenue and Employee CAGR 79% FY2008-12 Volume 76% growth – Non-linear 14.0% 9.0% more business offshore Employee Revenue FY08 FY12 USD Million 43% 33% Acquisitions Fixed price (acquire 1,938 contract domain, customers) FY08 FY12 2012 (nos) 2009 2011 20.2% 19.7% Countries of ~60 ~70 Remain Global operations competitive2 delivery Operating ~460 ~560 centres FY08 FY121) % of top 100 IT-BPO firms in India offering cloud/platform solutions; Patents filed by top 3 IT firms2) For only the top 4 Indian IT-BPO firms Source: NASSCOM
  10. 10. FY2013 outlook – double digit growthexpectedIT-BPO Export revenues* (USD billion) • The Indian IT-BPO industry has moved 75-77 beyond cost efficiencies to being a 68.7 transformation partner • Given the maturity, process excellence and value add, India continues to be the most trusted sourcing destination • Drivers different from the past, Industry fundamentals strong • Firms and customers reinvent business models and solutions • New breed of companies- products, startups FY2012 FY2013 P* fuelling growth * Does not include hardware Industry expected to meet lower end of the guidance P ProjectionsSource: NASSCOM
  11. 11. THANK YOU