Re: Indian IT sector is safe or not ?
Not only Indian it sector but all other sectors like Reality, Banking, Power etc. will also suffer or you can say suffering. because we are heavily depend on foreign markets. From stock markets view FII (Foreign Institutional Investor ) is selling billions of dollars equity in indian market to provide working capital and returns in their own country.
I think Indian IT sector will suffer for Next 6 months
I agree that IT industry earns primarily in USD and spends in INR, but have you realized what are the margins in the industry? Do you actually think that an industry which works on a profit margin of 30%+ would worry about a percentage point or two drop in the exchange rate?
Lets even assume that the dollar devalues so much that the margins in the IT industry are in trouble. But the beauty is that the single largest cost component in the industry is salaries. With the attrition being as high as 30% and the company recruiting at the rate of 25,000 employees a year, it should not be hard to cut costs and restore the margins back to the original levels. Also almost half to 1/3 of the salary is through performance linked pay, variable pay, or bonus, hence the HR has a lot of freedom to cull costs.
If you have realized, one of the biggest problems that Outsourcing industry was facing was resistance from US nationals. This is the major reason why the outsourcing industry could not expand at the rate at which they want to. However when the US company itself is in danger of going under, they will see Indians not as a threat, but as a saviors which would help them cut costs and reduce the losses.
"Let us remember that our interest is in concord, not conflict, and that our real eminence rests in the victories of peace, not those of war." -McKinley