The Indian IT industry has shown rapid growth and continues to expand operations and presence in global markets. The industry has been growing at a CAGR of 30.3% since FY04 and is expected to sustain the growth momentum.

The process of compiling this publication highlighted the size of the IT industry. For the second edition, we began with an initial database of over 11,000 companies that operate in the IT space. Of these, 210 companies feature in the publication; contingent on direct response received from the company, or authenticated data available in the public domain.

The companies profiled in the publication accounted for about 50% of the Indian IT industry, in terms of revenue. However, there is a high concentration among the top five companies including listed and un-listed companies, which together accounted for 59% of the total income of companies featured in the publication, and around 29.8% of the total IT industry.

In this publication, we have a separate chapter called Financial Analysis covering the listed IT companies, that comments on various aspects of the industry such as cost structure, growth, structure and so on. This chapter reveals an interesting trend - small enterprises are fast catching up with large players. Likewise small enterprises reported 68.6% growth in profit, higher expansion in profit margins and return on net-worth compared to larger players. We have added IT Insights, as an additional feature based on primary information collected from the players in this year’s edition. Some of the key findings include:

• 37% of companies of the total sample offer IT services as well as software products
• Custom Application development and IT consulting are the two popular software services
• 47% of the companies that responded to our questionnaire, are now looking at Tier – II cities such as Kochi, Coimbatore, Guwahati and Pune to establish delivery centres
• The companies surveyed achieved average annual growth rate of 56% in the last two years and expect to grow at 50% in the coming two years
• Offering value-added services and tapping new geographical markets seemed to be the most popular growth strategies, adopted by 17% and 16% of the respondent companies respectively
• BFSI and Retail & distribution services are the most promising verticals
• The major hurdles faced by the IT industry include shortage of skilled manpower, high employee attrition and the rising rupee

Going forward, we expect the IT industry to remain on the growth trajectory. Though the stronger rupee, shortage of skilled resources and wage inflation are likely to add pressure on the growth and profitability of the sector, volume growth is expected to continue in the near future.

India’s Top IT Companies 2008 has attempted to capture the essence of India’s IT sector. D&B India is confident that the publication will provide the right platform for the Indian IT industry, and will continue to endeavour towards recording the changing dynamics in the IT industry for posterity.

Kaushal Sampat
Chief Operating Officer
Dun & Bradstreet India