Satyam fraud holds up IT sector’s revised growth forecast

January 15th, 2009 - 7:01 pm ICT by IANS  

Bangalore, Jan 15 (IANS) The Rs.70 billion (Rs.7,000-crore/$1.43 billion) accounting fraud at Satyam Computer Services has forced the software sector’s umbrella body Nasscom to defer its revised forecast on the IT industry’s growth this fiscal (2008-09), a top industry representative said Thursday.”Now that the numbers of Satyam are still in dispute, it will be unfair to come out with a revised forecast,” Nasscom chairman Ganesh Natarajan told IANS here.

“As soon as we get clarity on the figures, we will revise the guidance for the industry as a whole,” he added.

Nasscom, which earlier projected that the $60-billion Indian software sector would grow by 21-24 percent in 2008-09, decided to revisit the numbers in light of the financial meltdown in the US and the global recession since the third quarter (October-December) of this fiscal.

“We are not sure of the numbers yet, especially after the company’s founder chairman (B. Ramalinga Raju) admitted to have committed a fraud over the years. It all depends how soon we will get the correct numbers,” Natarajan said on the sidelines of a technology conference.

“Hopefully, we should be in a position to revise the forecast by the end of this month, as Satyam figures are significant being the fourth largest IT bellwether.”

Though Nasscom was keen on revising the guidance in December third week, majority of its 1,200 members prevailed upon it to defer the process till January first week, as data on their third quarter performance was yet to be compiled.

“We will take a call on the revised forecast at our strategic review meet this month-end and hope to have it before our leadership summit in Mumbai mid-February,” Natarajan, who is also the chief executive of global software solutions provider Zensar Technologies, said.

While allaying fears of any fallout of the Satyam fraud on India’s IT industry, Natarajan admitted that the fourth quarter (January-March) was challenging as there was no let-up in the global meltdown and spending in IT sector was contracting.

“This quarter is challenging. Next few quarters will also be challenging. Though I am confident that the Indian IT industry would continue do well. I do not see any recession. There will be growth but it will be tempered. Employment will continue though not as aggressively as it was during the last three-four years when the industry grew by over 30 percent annually,” Natarajan said.

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