IT and ITeS August 2014

8/10/2019 IT and ITeS August 2014

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Strong growth

opportunities

The IT-BPM sector in India expanded at a CAGR of 25 per cent over 200013, which is 3

4 times higher than the global IT-BPM spend, and is estimated to expand at a CAGR of

9.5 per cent to USD300 billion by 2020

Leading sourcing

destination

India is the worldslargest sourcing destination, accounting for approximately 52 per cent

of the USD124130 billion market. The countrys cost competitiveness in providing IT

services, which is approximately 3-4 times cheaper than the US continues to be its USP in

the global sourcing market

Largest pool of ready to

hire talent

Indiashighly qualified talent pool of technical graduates is one of the largest in the world,

facilitating its emergence as a preferred destination for outsourcing, Computerscience/information technology accounts for the biggest chunk of India' fresh engineering

talent pool, with more than 98 per cent of the colleges offering this stream

Most lucrative sector forinvestments

The sector ranks fourth in Indias total FDI share and accounts for approximately 37 percent of total Private Equity and Venture investments in the country

Source:NASSCOM; Aranca ResearchNotes: BPMBusiness Process Management, USPUnique Selling Proposition


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Growing demand

Source: Nasscom, Aranca Research

Notes: SEZ stands for Special Economic Zone; BFSI stands for Banking, Financial Services and Insurance; E stands for Estimate, F stands for Forecast

Growing demand

Strong growth in demand forexports from new verticals

Expanding economy to propelgrowth in local demand

Global footprints

IT firms in India have deliverycentres across the world; as of2012, IT firms had a total of 580centres in 75 countries

IT & ITeS industry is well

diversified across verticals such asBFSI, telecom and retail

Policy support

Tax holidays extended to the ITsector

SEZ scheme since 2005 to benefitIT companies with single windowapproval mechanism, tax benefits,etc.

Setting up Information TechnologyInvestment Regions (ITIRs)

Competitive advantage

Cost savings of 6070 per centover source countries

A preferred destination for IT &ITeS in the world; continues to bea leader in the global sourcingindustry with 52 per cent marketshare

A huge talent pool

2013E

Industry

value:

USD108

billion

2020F

Industry

value:

USD300

billion

Advantage

India


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By early 90s,

US-based

companies

began to

outsource work

on low-cost and

skilled talent

pool in India

IT industry started

to mature

Increased

investment in

R&D and

infrastructure

started

India increasingly

seen as a product

development

destination

The number of firms

in India grew in size

and started offering

complex services

such as product

management and

go-to market

strategies

Western firms set

up a number of

captives in India

Firms in India becamemultinational companies with

delivery centres across the

globe (580 centres in 75

countries, as of 2012)

Indian firms make global

acquisitions

The IT sector is expected to

employ about 3.0 million

people directly and around 9.5

million indirectly, as of FY13 Indias IT sector is at an

inflection point, moving from

enterprise servicing to

enterprise solutions

In FY14 the launch of 10,000

start ups programmes has

already touched over 25,000

entrepreneurs

Pre-1995

1995-2000

200005

2005 onwards


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IT & ITeS sector

IT services Business ProcessManagement (BPM)

Hardware

Market Size: USD56.3

billion during FY13

Over 78 per cent of

revenue comes from

the export market

BFSI continues to be

the major vertical of

the IT sector

Market size: USD20.9

billion during FY13

Around 85 per cent of

revenue comes from

the export market


billion during FY12

The domestic market

accounts for a

significant share

The domestic market

is experiencing growth

as the penetration of

personal computers is

rising in India

Software products andengineering services


billion during FY13

Over 79 per cent of

revenue comes from

exports



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Indias technology and BPM sector (including hardware) is

estimated to have generated USD108 billion in revenue

during FY13 compared to USD100.9 billion in FY12,

implying a growth rate of 7.4 per cent

The contribution of the IT sector to Indias GDP rose to

approximately 8 per cent in FY13 from 1.2 per cent in FY98

22 22 24 2932 32

41 4750

5969

76

0.0

20.0

40.0

60.0

80.0

100.0

120.0

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013E

Domestic Export


Note: E - Estimates

Market size of IT industry in India (USD billion)


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Leading IT players by revenue (FY14)TCS is the market leader, accounting for about 10.1 percent of Indiastotal IT & ITeS sector revenue

The top six firms contribute around 36 per cent to the total

industry revenue, indicating the market is fairly competitive

Source: Bloomberg, Aranca ResearchNotes: *- 9MFY14, **- 2013 (Calendar Year)

Company name Revenue (USD billion)

TCS 13.4

Cognizant 8.8**

Infosys 8.3

Wipro 7.25

HCL Tech 3.9*

Tech Mahindra 3.09


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Total exports from the IT-BPM sector (excluding hardware) were estimated to have been USD76 billion during FY13;

exports rose at a CAGR of 13.1 per cent during FY0813E despite weak global economic growth scenario

Export of IT services has been the major contributor, accounting for 57.9 per cent of total IT exports (excluding hardware)

BPM accounted for 23.5 per cent of total IT exports during FY13

Growth in export revenue (USD billion) Sector-wise breakup of export revenue FY13E

57.9%23.5%

18.6%IT services

BPM

Software productsand engg. Services

22.2 25.827.3

33.539.9 43.9

9.911.7 12.4

14.1

15.917.8

8.810 10.4

11.4

13.014.1

0

10

20

30

40

50

60

70

80

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013E

IT services BPM Software products and engg. services

CAGR: 13.1%


Note: E stands for Estimate


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BFSI is a key business vertical for the IT-BPM industry. It generated export revenue of around USD31 billion during FY13,

accounting for 41.0 per cent of total IT-BPM exports from India

Approximately 85 per cent of total IT-BPM exports from India is across four sectors: BFSI, telecom, manufacturing and retail.

The hitherto smaller sectors are expected to grow

Export revenue growth across verticals (USD billion) Distribution of export revenue across verticals (FY13)

Source:MoRTH, Aranca Research, Department of Electronics and IT Annual Report (2012-13)

Notes: C&U: Construction & Utilities, T&T: Travel and Tourism, T&M: Telecom & Media, BFSI: Banking, Financial Services and Insurance,

The figures mentioned are for IT and BPM only and do not include engineering services and hardware exports

28

13

11

7

3

2

2

31

14

12

8

4

2

2

0 10 20 30 40

BFSI

T & M

Manufacturing

Retail

Healthcare

T & T

C & U

FY13 FY12

41%

18%

16%

10%

5% 3%

3% BFSI

T & M

Manufacturing

Retail

Healthcare

T & T

C & U


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US has traditionally been the biggest importer of Indian IT exports; over 60 per cent of Indian IT-BPM exports were

absorbed by the US during FY13

Non US-UK countries accounted for just 21.0 per cent of total Indian IT-BPM exports during FY12

Europe, one of the fast growing IT markets in 2012, is expected to emerge as a potential market as higher inclination

towards offshoring firms would increase demand for IT services

Geographic breakup of export revenue (USD billion)(FY13)

Distribution of export revenue across geographies (FY13)

Source:Nasscom, Aranca Research, Department of Electronics and IT Annual Report (2012-13)

Notes: ROW is Rest of the World, APAC is Asia Pacific

42

128

52

47

139

62

US UK ContinentalEurope

APAC ROW

FY12 FY13

62%

17%

11%

8%2%

US

UK

Continental Europe

APAC

ROW


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CategoryNumber of

players

Percentage of total

export revenue

Percentage of

total employeesWork focus

Large 11 47-50% ~35-38%

Fully integrated players offering complete range of

services

Large scale operations and infrastructure

Presence in over 60 countries

Medium 85-100 32-35% ~28-30%

Mid tier Indian and MNC firms offering services inmultiple verticals

Dedicated captive centres

Near shore and offshore presence in more than 30-

35 countries

Emerging 450-600 9-10% ~15-20%

Players offering niche IT-BPM services

Dedicated captives offering niche services

Expanding focus towards sub Fortune 500/1000

firms

Small >4,000 9-10% ~15-18%

Small players focussing on specific niches in either

services or verticals

Includes Indian providers and small niche captives



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The number of global delivery centres of IT firms in India reached 580, spreading out

across 75 countries, as of 2012

As of 2009, over 150 centres were set up by various Indian IT firms in North America

New business models, technologies and addition of new markets is pushing growth;

Infosys just opened a shop in Brazil; TCS already has a big set-up in Uruguay

Global sourcing hub India continues to maintain a leading position in the global sourcing market. Its market

share increased to 52.0 per cent in 2012 from 50.0 per cent in 2011

Engineering offshoring

India is the most preferred location for engineering offshoring, as per a customer poll

conducted by Booz and Co

Companies are now offshoring complete product responsibility

Most lucrative sector for

investments

Increased focus on R&D by IT firms in India resulted in rising number of patents filed by

them

The number of patents filed by the top three IT companies increased to 858 in 2012 from

150 in 2009

Global delivery

model


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Changing business

dynamics

IndiasIT market is experiencing a significant shift from a few large-size deals to multiple

small-size ones

The number of start-ups in technology is expected to reach 50,000, adding to around 2 per

cent of GDP

Delivery models are being altered, as the business is moving to capital expenditure

(capex) based models from operational expenditure (opex), from a vendors frame of

reference

Large players gaining

advantage

Large players with a wide range of capabilities are gaining ground as they move from

being simple maintenance providers to full service players, offering infrastructure, system

integration and consulting services

Of the total revenue, about 80 per cent is contributed by 200 large and medium players

New technologies Disruptive technologies, such as cloud computing, social media and data analytics, are

offering new avenues of growth across verticals for IT companies

Growth in non-linear

models

Indias IT sector is gradually moving from linear models (rising headcount to increase

revenue) to non-linear ones

In line with this, IT companies in India are focusing on new models such as platform-based

BPM services and creation of intellectual property


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Consumerisation of IT

Global outsourcing is being used to drive fundamental re-engineering of end-to-end

processes

Increased emphasis on beyond cost benefits

IT firms in the current phase have moved up the value chain, providing innovation-led

growth to clients from SLA satisfaction and RoI calculations

Emergence of Tier II

cities

Tier II and III cities are increasingly gaining traction among IT companies, aiming toestablish business in India

Cheap labour, affordable real estate, favourable government regulations, tax breaks andSEZ schemes facilitating their emergence as a new IT destination

Giving rise to the domestic hub and spoke model, with Tier I cities acting as hubs and Tier

II, III and IV as network of spokes

SMAC technologies, an

inflection point for

Indian IT

Social, Mobility, Analytics and Cloud (SMAC), a paradigm shift in IT-BPM approaches

experienced until now, is leading to digitisation of the entire business model

IT vendors in India to generate USD225 billion from SMAC-related revenue by 2020

Notes: SLA: Service Level Agreement; RoI: Return on Investment


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Competitive Rivalry

Intense competitive rivalry exists due to low switching costs

Most of the bigger Indian firms offer same services and there is little

product differentiation

Threat of New Entrants Substitute Products

Bargaining Power of Suppliers Bargaining Power of Customers

Easy entry as the capital

required is low

Large players, however,

toughen prospects of small and

medium players to win large

deals

Bargaining power of suppliers

is less as most of their

businesses come from the

same geographies

Bargaining power is high as

many IT firms fight for a similar

project

Firms are mostly dependent on

same geography, which

increases customer power

Threat is medium as new

centres, such as Philippines

and China, are fast gaining

ground among investors due to

their low cost advantages

Competitive

Rivalry

(High)

Threat of New

Entrants

(Medium)

Substitute

Products

(Medium)

Bargaining

Power of

Customers

(High)

Bargaining

Power of

Suppliers

(Low)


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Companies are moving to Tier II & III cities to gain low cost advantage

Infosys moved to Indore and Mohali in FY14 to expand its penetration in India and reduce

costs

Companies are moving to emerging economies of East Europe and Latin American

countries

Social Computing, Mobility, Analytics and Cloud (SMAC) is taking significant leaps Companies are getting into this field by offering big data services, which provides clients

better insights for future cases

Most of the IT companies have been offering same products and services to their clients

The companies are working towards product differentiation through various other services

by branding themselves, e.g. Building Tomorrow's Enterprise by Infosys

Companies are now investing a lot in R&D and training employees to create an efficient

workforce, enhancing productivity and quality

R&D forms a significant portion of companies expenses, which is critical when margins are

in pressure, to promote innovations in the changing landscape

Expanding in Tier II & III

cities and externally

Movement to SMAC &digital space

Product differentiation

Promotion of R&D


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Growth

drivers

TalentPool

Domestic

growth

Infrastructure

Globaldemand

Policysupport

Computer penetration expected

to increase

Government likely to become a

major contributor to domestic

demand by 201314

4.7 million graduates are estimated to have

been added to Indiastalent pool in FY13

Strong mix of young and experienced

professionals

Global IT offshore spending

expected to have increased at a

CAGR of 8.0 per cent duringFY1113

Global BPM spending

estimated to have expanded at

a CAGR of around 7.0 per cent

during FY1113

Tax holidays for STPI andSEZs

Procedural ease and single

window clearance for setting up

facilities

A fund of around USD1.6 billion

to promote new technology

start-ups in the 2014-15 Budget

Robust IT infrastructure across

various cities in India such as

Bengaluru

Delivery centres spread across

various countries

Source: STPI stands for Software Technology Park of India

Note: SEZ stands for Special Economic Zone


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Domestic IT market by customer segment (FY2013E)Large enterprises account for a significant share of the ITmarket and added USD15 bn to domestic revenue in FY13

Expansion of Indian firms in global markets is

leading to increasing spend on IT for efficient and

cost-effective operations

SMB is another potential demand pool for IT services in thedomestic market

Adoption of technology for enhancing product visibility,

reach and operational efficiencies is leading to higher

demand for IT services from SMBs

With 46 million units, India has the second largest

SMB base in the world

47%

26%

15%

12%Large enterprises

SMB

Governement

Consumers

USD32 billion

Source:Nasscom, Aranca Research

Notes: Small and Medium Business; E indicates estimated numbers


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15.5

0

20

40

60

80

100

FY13 FY15F FY20F

~22-23

~90-100

Domestic revenue from IT and BPM (USD billion)Introduction of large e-Governance projects to providebetter services through IT and focus on the formation of the

cyber policy led to higher demand for IT and hardware from

the government

The Central Government and State/UT Government

allocated 0.91.2 per cent and 2.83 per cent,

respectively, of total budget for IT spend under the

12thFive Year Plan

Strong consumer demand for IT service and products:

Advent of smartphones, tablets and iPads

Industry leaders are stressing the need for

promoting support start-ups

Rising computer literate population

Enhanced Internet and mobile penetration

Growing disposable income strengthening consumer

purchasing power


Notes: UT- Union Territory, F- Forecasts


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Export revenue from IT and BPM (USD billion)Global IT-BPM spending to grow 56 per cent to nearlyUSD2 trillion by 2013

Global sourcing to rise at a faster pace of 911 per cent to

USD124130 billion in 2013

Emergence of SMAC would provide USD1 trillion market by

2020

Emerging economies are likely to be a major contributor to

IT spend growth

IT spend in emerging economies to grow 3-4 times

faster than advanced economies

The BRIC IT market is estimated at USD380420

billion by 2020

Stable tax regime, reducing litigation related to tax and

providing conducive environment for start-ups will improve

the business environment

Source:Nasscom, Aranca Research, Budget 2014-15

Note: UT- Union Territory

Core and non core segments growth prospects

48

~106-111

0

20

40

60

80

100

120

FY11 FY14F

22 11 1.2 7.6 3.2 3.135 15 2 13 5.5 5.505

10

1520

253035

40

CADM ER&D IT consulting IS-sourcing

Knowledgeservices

Softwaretesting

FY13E FY16F

Core segments Emerging segments17%

10%20% 20% 21%

19%


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Graduates addition to talent pool in India (in millions)Availability of skilled English speaking workforce has been amajor reason behind Indias emergence as a global

outsourcing hub

India added around 4.7 million graduates to the talent pool

during FY13

Growing talent pool of India has the ability to drive the R&D

and innovation business in the IT-BPM space


Note: Graduates includes both graduates and post graduates

3.2 3.5

3.7 4.0

4.4

4.7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

FY2008 FY2009 FY2010 FY2011 FY2012 FY2013E


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Training expenditure by Indian IT-BPO sectorAbout 2 per cent of the industry revenue is spent on trainingemployees in the IT-BPM sector

Forty per cent of total spend on training is spent on training

new employees

Numerous firms have forged alliances with leading

education institutions to train employees


27%

24%19%

13%

11%

6% Recruitment cost

Salaries for inhousetraining staff

Employee welfare

External training(existing employees)

Other costs

External training(new recruits)


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Short term

Medium term

Long term

Objectives Initiatives

Enhance overall yield of employees

Improve employability

Expand to Tier II cities to reduce

operating costs

Low skill dependence

Industry to enhance investment in

training

Use NAC and NAC Tech to assess

employability of talent pool

Identified new tier II locations

Reduce investment on training

Develop specialist and project

management expertise

Launched the National Faculty

Development Programme to increase

suitability of Faculty

Aiding industry access to specialist

programmes offered by independent

agencies

Expand education capacity

Promote reforms in education

Expansion of higher education

infrastructure; 20 new IIITs to be set up

by the government

Programme to increase PhDs in

technology


Notes: NACNasscom Assessment of Competence, IIIT: Indian Institutes of Information Technology


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Characteristics of STPI and SEZ in IndiaOf 53 STPI centres, 46 are in Tier II and III cities

As of FY2013, 4,534 STPI units were operational, while

3,755 units have exported IT services and products.

IT-SEZs have been initiated with an aim to create zones

that lead to infrastructural development, exports and

employment

Parameters STPI SEZ

Term 10 years 15 years

Fiscal benefits

100 per cent tax

holiday on export

profits

Exemption from

excise duties and

customs

100 per cent tax

holiday onexports for first

five years

Exemption from

excise duties and

customs

Location and

size

restrictions

No location

constraints

23 per cent STPIunits in tier II and

III cities

Restricted to

prescribed zones

with a minimum

area of 25 acres

Source:Nasscom, Aranca Research, STPI (Software Technology Parks of India)


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IT sector employment distribution in Tier I and Tier II/III cities

43 new tier II/III cities are emerging as IT delivery locations;

this could reduce pressure on leading locations

Cost in newer cities is expected to be 28 per cent lower

than that in leading cities

Lower cost and attrition, affordable real estate and supportfrom local government, such as tax breaks, STPI and SEZ

schemes, are facilitating this shift of focus

Over 50 cities already have basic infrastructure and human

resource to support the global sourcing and business

services industry

Some cities are expected to emerge as regional hubssupporting domestic companies

Trends in tier II and III cities

1,821 1,615

175

3,230

-

1,000

2,000

3,000

4,000

5,000

6,000

2008 2018

Tier I locations Tier II/III locations

Source:Nasscom, E&Y, Aranca Research


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Number of GICs in India

Global In-House Centers (GIC), also known as captive

centers, are one of the major growth drivers of the IT-BPM

sector in India

As of FY2012, the captive segment accounted for 16-18 per

cent of the IT-BPM industry revenue

The impact of the segment goes beyond revenue andemployment, as it helped in developing India as a R&D hub

and create an innovation ecosystem in the country

Within the captive landscape, Engineering Research &

Development/Software Product Development (ER&D/SPD)

is the largest sub-segment

Companies from North America and Europe are major

investors in the captive segment in India, accounting for

over 90 per cent of captives in the country

Key highlights

Source:Zinnov, Nasscom, Aranca Research

0

100

200

300

400

500

600

700

800

2000 2005 2010 2012

~180

450+

700+

750+


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PE-VC investments in IT & BPM (USD billion)

The IT & BPM sector continued to attract PE and VC investments in 2013, accounting for a significant proportion with 154

deals

Total P/E investments were USD959 million in Q4FY13, with the biggest deal being Apax Partners investment ofUSD420million in GlobalLogic

Total P/E investments were USD2.2 billion in FY14

Two of the largest regions attracting PE deals in the sector during Q42013 were as follows:

NCR with USD471 million

Bengaluru with USD220 million

Source:Venture Intelligence, Nasscom, Aranca Research

Share of IT-BPM in PE-VC investments

0.8

1.9

3.2

2.2

0

0.5

1

1.5

2

2.5

3

3.5

2008 2011 2012 2013

184

379

484

393 388

5825 32 40 40

0

100

200

300

400

500

600

2009 2010 2011 2012 2013

Number of deals Share of IT-BPM


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Source:All the figures are taken from International Data Corporation (IDC)

and Nasscom and are FY10 estimates

Note: SMB- Small and Medium Businesses

BRIC nations, continental Europe, Canada and

Japan have IT spending of approximately

USD380420 billion

Adoption of technology and outsourcing is

expected to make Asia the second largest IT

market

Government, healthcare, media and utilities

together have IT spend of approximately USD190

billion, but account just 8 per cent of Indias IT

revenue

Numerous sectors are expected to depend on

technology and service providers to reduceservice cost

SMBs have IT spend of approximately USD230

250 billion, but contribute just 25 per cent to Indias

IT revenue

The emergence of new service offerings and

business models would aid in tapping market

profitably and efficiently

Newverticals

Newcustomersegments

Newgeographies


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Growth trend of traditional verticals

Traditional verticals, i.e. BFSI, telecommunication and manufacturing, continue to remain the largest in terms of IT adoption

and are expected to grow at an average of 15 per cent

Implementation of cloud environment and mobility is the way forward for traditional verticals.

Emphasis on other emerging verticals (e.g. education, healthcare and retail) to aid growth in IT firms in India.

Shift from IT adoption infrastructure, automation and digitisation to smart IT marks future trend of services in emerging

verticals


Growth trend of emerging verticals

128 80

339

195

126

506

243193

595

0

100

200

300

400

500

600

700

BFSI Telecom Manufacturing

FY10 FY13E FY15F

17.2

11.6

4.4

34.5

17.5

8.7

39.5

24.8

9.7

0

5

10

15

20

25

30

35

40

45

Education Healthcare Retail

FY10 FY13E FY15F


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Market size of other progressing verticals by 2020

(USD billion)

As IT is increasingly gaining traction in SMBs business

activities, the sector offers impressive growth opportunities

and is estimated at approximately USD230250 billion by2020

In a bid to reduce cost, governments across the world are

exploring outsourcing and global sourcing options

Technologies, such as telemedicine,Health, remote

monitoring solutions and clinical information systems, wouldcontinue to boost demand for IT service across the globe

IT sophistication in the utilities segment and the need for

standardisation of the process are expected to drive

demand

Digitisation of content and increased connectivity is leading

to a rise in IT adoption by media

Companies to focus on local problems and find engineeringsolutions

Source:Nasscom, Aranca ResearchNote: Small and Medium Business

0

50

100

150

200

250

300

SMB Government Healthcare Utilities Media


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Growing technologies future growthEmerging technologies present an entire new gamut ofopportunities for IT firms in India

SMAC provide USD1 trillion opportunity

Cloud represents the largest opportunity under SMAC,

increasing at a CAGR of approximately 30 per cent to

around USD650700 billion by 2020

Social media is the second most lucrative segment for IT

firms, offering a USD250 billion market opportunity by 2020


Notes: Size of bubble indicates market size,

*CAGR and market size for Big data/analytics is till 2015

Cloud

Social media

Enterprisemobility

Bigdata/analytics*

10%

20%

30%

40%

50%

60%

0 200 400 600 800


39/55

Emerging geographies would drive the next growth phase for IT firms in India

BRIC would provide USD380420 billion opportunity by 2020

Focus on building local credible presence, high degree of domain expertise at competitive costs and attaining operational

excellence hold key to success in new geographies


Countries offering growth potential to IT firms

Country IT spend Indias penetration Key segments

Canada USD63 billion ~1.5 per cent Enterprise applications, cyber security, healthcare IT

Europe USD230 billion


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Segment-wise revenue breakdown (FY14)Established in 1968, Tata Consultancy Services (TCS) is anInformation Technology (IT) services, consulting and

business solution company. The company provides end-to-

end technology and technology-related services to global

enterprises. The companysbusiness is spread across the

Americas, Europe, Asia-Pacific, and Middle East and Africa

(MEA)

Achievements:

2014: Gold and Silver Stevie Winner at the American

Business Awards

2013: Won Best Performing Consultancy Brand award in

Europe

2013: Received Red Hat North America Awards for System

Integrator Partner of the Year

2012: TCS China ranked among the top 10 global services

providers in China

2012: TCS BaNCS won Xcelent Customer Base Awards

2012

Source:TCS website and Annual report, Aranca Research

15.5%

12.0%

11.9%

8.4%

4.7%

3.4%

2.5% Enterprise Solutions

Business ProcessServices

InfrastructureServices

Assurance Services

Engineering &Industrial Services

Global Consulting

Asset LeveragedSolutions


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Number of customersFinancial performance (USD billion)

Source:TCS website and Annual Report, Aranca Research

6.0 6.3

8.2

10.2

11.6

13.4

1.4 1.72.3

2.8 3.13.9

0.0

2.0

4.06.0

8.0

10.0

12.0

14.0

16.0

FY09 FY10 FY11 FY12 FY13 FY14

Revenue Operating profit

0

100

200

300

400

500

600

700

800

USD1million+

USD5million+

USD10million+

USD20million+

USD50million+

USD100million+

FY5 FY11 FY12 FY13 FY14


43/55

Source: TCS website and Annual report, Aranca Research

Energy resources

& utilities

Life sciences &

healthcare

Manufacturing

Media &

entertainment

Retail and consumer

packaged goods

BFSI

Consolidation of

market position

through CMC

acquisition

Issued IPO in the

market in India and

raised USD1.2

billion in 2004

Acquisition of IT

service firm Alti in

France in 2013

With a brand value of

over USD1 billion,

consolidated its

position as one of the

largest IT players

1968 2001 2003 2005 2007 2009 2011 2013

Expanded of

geographic

presence

1968Indias first

software service

company

FY03

Became the first

software companyin India to cross

USD1 billion

revenue

FY14

USD13.4 billion

revenue

FY13

Active clientbase: 1,156

New clients:

153


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Segment-wise revenue breakdown (FY13)Established in 1991, HCL Technologies Ltd is an ITservices company providing enterprise and custom

application, business transformation, infrastructure

management, business process outsourcing and

engineering services. The companysnetwork of 26 offices

is spread across the US, Europe and Asia Pacific

Achievements:

2014: Received Best Governed Company Award from Asian

Centre for Corporate Governance & Sustainability

2013: Won IT Europa, European IT Excellence Awards andAsia Pacific Enterprise Leadership Award 2013

2012: Received Market Facing Innovation award at the

NASSCOM Innovation Awards, 2011

2011: Received Operational Excellence & Quality award at

BPO Excellence Awards 201011

Source:HCL Technologies website and Annual Report, Aranca Research

32%

24%

20%

19%

5%Custom applicationservices

Infrastructureservices

Enterpriseapplication services

Engineering & R&Dservices

Business services


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1,8792,228

2,560

3,452

4,345 4,686

3,952

250 317 321438 656 746 731

-

1,000

2,000

3,000

4,000

5,000

FY08 FY09 FY10 FY11 FY12 FY13 9MFY14


397

164

96

45 2514

10

428

186

102

51 30 18

110

50

100150

200

250

300

350

400

450

USD1million+

USD5million+

USD10million+

USD20million+

USD30million+

USD40million+

USD50million+

30-Jun-12 30-Jun-13


46/55

1997 1998 1999 2000 2002 2004 2006 2008 2010 2011 2012 2013

Life sciences &

healthcare

Media

Retail & consumer

packaged goods

Telecom

Manufacturing

Financial services

FY12

Revenue

crossed USD4billion

USD100 million+clients reached 5

Organic growth

through prudent

strategies

Adoption of non-

linear strategy;formation of JVs

and alliances

Acquisition of

Capitalstream andAXON Group

Diversification of

business andgeography mix

1997Established with

spun-off HCLs

R&D business

FY06

Signed the

biggest ever

software service

deal with DSG

FY09Launched

IPO



47/55

Segment-wise revenue breakdown (FY14)Established in 1981, Infosys Limited is engaged inconsulting, engineering, technology and outsourcing

services. The companys end-to-end services includeconsulting and system integration. Infosys operates through

30 offices across India, the US, China, Australia, the UK,

Canada and Japan

Achievements:

2013: Infosys Public Services, Inc (IPS) was named the

healthcareshottest company for 2013

2013: Ranked first in the annual Euromoney Best Managed

Companies in Asia survey

2013: Received NASSCOM Business Innovation Award

2013 for Infosys Edge

2012: Identified as an innovation leader in KPMGsGlobal

Technology Innovation Survey 2012

Source: Infosys website and Annual Report, Aranca Research

34.7%

21.3%

20.0%

18.3%

5.8%

Financial services &Insurance

Manufacturing

Energy utilities,

Communication andServices

Retail, Consumerpackaged goods, Logisticsand Life Sciences

Life Sciences& Healthcare


48/55


Source: Infosys website and Annual Report, Aranca Research

5.0 4.8

6.07.0

7.4 8.3

1.7 1.6 1.82.0 1.9 2

0.0

1.0

2.03.0

4.0

5.0

6.0

7.0

8.0

9.0

FY09 FY10 FY11 FY12 FY13 FY14


0

100

200

300

400

500

600

USD1million+

USD5million+

USD10million+

USD20million+

USD50million+

USD100million+

2012 2013 2014


49/55

1981 1991 1993 1995 1997 1999 2002 2006 2010 2012

Logistics and

distribution

Industrial

manufacturing

Healthcare,

pharmaceuticals &

biotech

Financial service

Automotive

Aerospace, defense

& airlines

Organic growth

Expansion acrossthe world and

offshore business

Acquisition of

Lodestone Holding

AG

Strong

diversified clientbase of 890

clients in FY14

Large client

acquisitions

1981

Founded in

Pune with an

initial capital of

USD250

1993Launched

IPO

FY14

USD8.3 billion

turnover

1999

Reached

USD100 million

and listed onNASDAQ

Source:Infosys website and Annual Report, Aranca Research


50/55


51/55

National Association of Software and Services

Companies (NASSCOM)

Address: International Youth Centre Teen Murti Marg,

Chanakyapuri, New Delhi110 021

Phone: 91 11 2301 0199

Fax: 91 11 2301 5452

E-mail: [email protected]


52/55

APAC:Asia Pacific

BFSI: Banking, Financial Services and Insurance

BPM: Business Process Outsourcing

CAGR: Compounded Annual Growth Rate

C&U: Construction & Utilities

FDI: Foreign Direct Investment

GOI: Government of India

INR: Indian Rupee

IT & ITeS: Information Technology-Information Technology Enabled Services

NAC: Nasscom Assessment of Competence

RoI: Return on Investment

ROW: Rest of the World

SEZ: Special Economic Zone

SLA: Service Level Agreement


53/55

SMB: Small and Medium Businesses

STPI: Software Technology Parks of India

T&M: Telecom & Media

T&T: Travel and Transport

USD: US Dollar

USP: Unique Selling Proposition

UT: Union Territory

Wherever applicable, numbers have been rounded off to the nearest whole number


54/55

Calculated as average for the year

Year INR equivalent of one USD

200405 44.81

200506 44.14

200607 45.14

200708 40.27

200809 46.14

200910 47.42

201011 45.62

201112 46.88

201213 54.31

201314 60.28

Exchange rates (Fiscal Year)

Year INR equivalent of one USD

2005 43.98

2006 45.18

2007 41.34

2008 43.62

2009 48.42

2010 45.72

2011 46.85

2012 53.46

2013 58.44

Q12014 61.58

Exchange rates (Calendar Year)


55/55

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