IT/ITES News Update

APRIL 23, 2012: CAPGEMINI EYES IT SERVICES MARKET

European consulting major Capgemini is bracing for a major play in the domestic information technology services market in India 

The French company, which reported $13.5 billion in revenues in 2011, is pitching for transformational projects in India, backed by its consulting capabilities that have been Capgemini's forte globally, according to Salil Parekh, a top executive.

The Paris-headquartered entity is now planning to introduce some of its globally-successful technology services in India, says Parekh, Capgemini's CEO (application services business) for North America, UK and Asia Pacific), and also heading its global financial services. 

Given the company's understanding of the requirements of the Indian customers, the 1967-founded Capgemini has identified energy and utility, financial services and telecom as the major focus areas.

APRIL 20, 2012: INFOSYS INVESTORS CONCERNED OVER COMPANY'S PERFORMANCE

The whispers surrounding Infosys performance are getting louder. Institutional investors, who have invested over $15 billion in the company, are concerned over the deteriorating financial performance of the company.

Questions are also being raised over Infosys rational to maintain high margins, especially in a difficult macro environment when competition is focused on gaining market share. Infosys has close to 600 investors.

The company, which announced its fourth quarter number earlier this week, missed its March 2012 guidance by 1.9-2.2 per cent.

More importantly it's guidance of 8-10 per cent growth in FY13 shocked the street, as it was lower than IT industry body Nasscom's estimate of 11-13 per cent. 

APRIL 19, 2012:TECHNOLOGY BUYERS REVIEW IT BUDGETS QUARTERLY

Technology buyers from Eurozone and the US have started reviewing their annual IT budgets on a quarterly basis.

Customers lack market visibility today and therefore budget review frequencies are getting even shorter to monthly levels, say industry watchers.

Practice head of Tata Strategic Management Group, K Raman, says IT budgets are reviewed quite frequently today with uncertainty still looming large.

Customers are extremely cautious and are keen to get a maximum return on their investments. So goals are set and reviewed on a quarterly/ monthly basis from the earlier annual basis. 

APRIL 18, 2012 :TECHNOLOGY BUYERS REVIEW IT BUDGETS QUARTERLY

Technology buyers from Eurozone and the US have started reviewing their annual IT budgets on a quarterly basis.

Customers lack market visibility today and therefore budget review frequencies are getting even shorter to monthly levels, say industry watchers.

Practice head of Tata Strategic Management Group, K Raman, says IT budgets are reviewed quite frequently today with uncertainty still looming large.

Customers are extremely cautious and are keen to get a maximum return on their investments. So goals are set and reviewed on a quarterly/ monthly basis from the earlier annual basis. 

APRIL 17, 2012 :BPO MAJOR GENPACT TO ACQUIRE ACCOUNTING PLAZA

BPO major Genpact today said it will acquire Accounting Plaza, a provider of finance and accounting (F&A) and human resources (HR) services, for an undisclosed sum.

Founded in 2000, Accounting Plaza provides F&A, HR and PeopleSoft ERP services to the world's sixth largest retailer Ahold and other clients in retail, wholesale, banking and healthcare industries.

It has about 600 full-time employees working out of its centers in the Netherlands, Poland and Czech Republic.

"This acquisition will significantly expand Genpact's domain expertise in the retail industry in addition to its service delivery footprint in Europe," Genpact said in a statement. 

APRIL 16, 2012 :COGNIZANT INSTITUTIONAL INVESTOR LACERA WANTS DIRECTORS TO BE ELECTED ANNUALLY, NOT THREE-YEAR TERM

 A tug of war between minority shareholders and the board of directors is brewing at Cognizant Technology Solutions, India's third-largest software outsourcing company.

In Cognizant's upcoming June 5 annual shareholder meeting, institutional investor Los Angeles County Employee Retirement Association, or Lacera, which manages $39 billion in assets, is putting to vote a proposal at the shareholder meeting on June 5 to make it mandatory for all board directors to be elected annually, as against a three-year term at present. Cognizant has recommended that all shareholders vote against the proposal.

In its response to the proposal, Cognizant's board said that its present policy for election of directors provides stockholders a meaningful role to hold them accountable for their actions or failure to act. It also safeguards against a hostile acquirer who may want to replace most directors with its own nominees at a single annual meeting.

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Economy Update

RBI SURPRISES WITH 50 BPS RATE CUT, KEEPS CRR UNCHANGED

The Reserve Bank of India cut its policy repo rate to 8.00 percent, compared with expectations for a 25 basis point.

India's central bank cut interest rates first time in three years by an unexpectedly sharp 50 basis points to give a boost to flagging economic growth but warned that there is limited scope for further rate cuts. 

STRUCTURAL ISSUES TO KEEP RUPEE WEAK NEAR-TERM: ANALYSTS

The rupee is likely to remain weak in the near-term as factors like low capital inflows and high current account deficit are expected to take their toll, industry experts feel. 

"Unless structural issues like high current account deficit (CAD) and balance of payment (BoP) situation improve, the rupee is likely to remain weak in the near future," said Indian Overseas Bank general manager, treasury, T S Srinivasan

CII ASKS PM TO FAST-TRACK ECONOMIC REFORMS

Confederation of Indian Industry has asked Prime Minister Manmohan Singh to fast track economic reforms, which in turn would boost investments and accelerate growth, chamber's new president Adi Godrej said.

On the economic growth, Godrej said with GDP growth at 6.9 per cent in 2011-12 vis-a-vis 8.4 per cent in the previous two years, the Indian economy is currently in the midst of a slowdown

The government expects the growth rate to rise to 7.6 per cent during 2012-13 from the 6.9 per cent in the previous fiscal.

Godrej said to revive investment sentiment; the RBI needs to cut the interest rates by 100 basis points by December, 2012.

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Business News Update

APRIL 23, 2012: US FEARS ON INDIA'S TAX REGIME ARE UNFOUNDED, ASSERTS FM

Finance Minister Pranab Mukherjee has made clear that US business and industry's fears on India's tax regime, particularly the recent retrospective tax proposals, are totally unfounded.

He added that he had clarified this issue in no uncertain terms with US Treasury Secretary Timothy Geithner during their bilateral meeting.

Mukherjee asserted that "apprehensions that the large number of tax cases will be reopened because of the restrospective amendment of that particular section is totally unfounded," he said, "because other laws - other section of the Income Tax Act - clearly state that no case can be reopened beyond six years.

APRIL 20, 2012: GOVT SPENDING ON PROJECTS HITS ALL-TIME HIGH

In what belies the popular notion of a depressed investment environment in the country, the government's spending on central sector projects commissioned in the first half of the previous financial year had risen exponentially, according to data obtained from the Ministry of Statistics and Programme Implementation.

In the central sector, India [commissioned projects worth a record Rs 43,000 crore (Rs 430 billion) between April and September 2011-12, a 250 per cent jump over the investment of Rs 17,835 crore (Rs 178.35 billion) in projects completed during the same period in 2008-09, which in turn was a 38 per cent rise over the amount spent in 2005-06.

APRIL 19, 2012: MAHINDRA SATYAM TO INVEST $240 MN ON INFRASTRUCTURE

Mahindra Satyam will invest $240 million globally to set up infrastructure and support services for its clients over the next three years, top company official said in Singapore on Thursday.

"Fifty per cent of the investment will be made in Asia Pacific, especially in Singapore, Malaysia and Indonesia," Mahindra Satyam CEO C P Gurnani told media in Singapore.

The company is holding a series of meetings with investors, analysts and clients in Singapore.

"The majority of the investments will go into creating infrastructure, training and development facilities and solutions either in engineering or mobility to create specific solutions for the markets," Gurnani said.

Investments will be for facilities outside India and not involve any merger and acquisition or joint ventures, he said.

APRIL 18, 2012: INDIA NEEDS SPEEDY REFORMS FOR HIGHER GROWTH: IMF

International Monetary Fund said India would need to accelerate economic reforms to achieve its 'potential' growth rate even as it expressed concern over high inflation.

In a statement issued after its Article IV Consultation with India, the IMF said that Reserve Bank of India should be ready to increase rates to check any further rise in inflation.

The statement comes a day after RBI reduced interest rates by 0.50 per cent to arrest declining growth.

"A major challenge will be to bring growth back to potential and ensure its inclusiveness, while further lowering inflation. This will require a reinvigoration of structural reforms and fiscal consolidation," IMF said after its annual discussion with the Indian government termed as Article IV Consultation

APRIL 17, 2012: MAKEMYTRIP LOSES INDIGO, MUCH OF JET BIZ

Two private airlines are at war with leading online travel agency MakeMyTrip, alleging it continued to offer arbitrary and opaque fares despite objection by the Directorate General of Civil Aviation.

IndiGo has withdrawn all content from MakeMyTrip, and Jet Airways [Get Quote ] has drastically reduced its inventory on the site.

Offering opaque fares is a trade practice where a portal sells heavily discounted tickets but does not disclose the name of the airline until the payment is made by the customer.

Soon after the airlines took this step, the portal removed all bargain fares from its site.

MakeMyTrip claims the opaque fares were withdrawn on March 28, the day DGCA asked airlines to stop publishing opaque fares and users could see all flight details before making the payment. 

APRIL 16, 2012   STANDARD CHARTERED BANK RESEARCH REPORT WARNS OF FURTHER SLIP IN DEPOSIT GROWTH

An industry report has said the concerns about the falling deposit growth persist, and if the uptick falls below 16 per cent, it is likely to put pressure on bank spreads in a falling rate environment. 

Despite the recent one-off rise in deposits towards the last fortnight of the past fiscal, there are concerns about the deposit growth, says a Standard Chartered Bank research report. 

"If deposit growth is below 16 per cent, it is likely to put pressure on bank spreads in a falling rate environment because banks will not be able to bring down deposit rates sharply while weak corporate demand coupled with likely government pressure will drive lending rates to come down faster," says the report. 

Deposit growth decelerated from February and fell to as low as 13.4 per cent on the week ending March 23, but picked up substantially to 17 per cent year on year by March 30, largely due to a pickup in one-off, short-term corporate deposits, notes the report. 

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Leadership Changes

DONALD D'SOUZA MOVES TO HDFC BANK

Donald D'Souza, is the new head of HDFC Bank's equity capital markets business

He has worked with some of the largest corporate and private equity groups in India and has expertise in most equity products in investment banking including initial public offer, qualified institutional placement, rights issue, Global and American Depository Receipts and mergers and acquisitions.

Prior to his appointment in HDFC Bank, D'Souza was the president of IIFL's investment banking business.

WORLD BANK SELECTS JIM YONG KIM AS IT’S PRESIDENT

US nominee Jim Yong Kim was chosen as the next president of the World Bank, an appointment that continues the longstanding tradition of an American leading the Washington-based institution.

"Dr Jim Young Kim of the United States would be the next President of the World Bank," an official announcement said

Kim, 52, will take over at the beginning of July, after the current president, Robert B Zoellick, steps down at the end of his five-year term.

CII ELECTS ADI GODREJ AS NEW PRESIDENT

 Adi Godrej, Chairman of the Godrej Group, has been elected as the president of Confederation of Indian Industry (CII) for the year 2012-13. 

He has succeeded Tata Steel Managing Director B Muthuraman, CII said in a statement.

Godrej is also the Chairman of Indian School of Business. S Gopalakrishnan, Co-Founder and Executive Co-Chairman, Infosys Technologies Ltd is the President Designate of CII for 2012-13, it said. 

Gopalakrishnan, a Padma Bhushan awardee, is also on the Board of Governors at the Indian Institute of Management - Bangalore. 

WIPRO TECH APPOINTS SUCHIRA IYER AS CMO

Wipro Technologies today said it has appointed Suchira Iyer as Chief Marketing Officer (CMO) for IT business.

Iyer has been associated with the company, the consulting and outsourcing business of Wipro, for the last 18 years, she was the Country Head for the Greater China region in her immediate past role.

She will report to T K Kurien, Chief Executive of IT business, the company said in a release. 

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