Inward focused IT cos are a good bet
The Indian IT companies are buckling under the pressure of the appreciating rupee, their revenues have dipped this quarter. But, inverstors still opt for IT firms which have a greater share of their revenues emanating from the domestic market. These companies are at a lesser risk as fat as the rupee appreciation issue is concerned. There are some Indian IT companies whose major chunk of revenues is garnered from the domestic operations.
The list has names like Tulip IT services, CMC, NIIT, Rolta India, 3i Infotech and Tata Elxsi, who are less prone to the forex fluctuations and at the same time demonstrate moderate to rebust operating profitability. These IT companies are niche players, like Rolta lays special emphasis on engineering solutions and geospatial information services.
Tulip focuses on corporate data communications and network connectivity solutions, NIIT is engaged in IT education, 3i has significant presence in the banking, insurance and financial domain. This sets them apart from their IT exporter counterparts who are mainly into applications development and maintenance services.
Rolta has an operating margin to the tune of 42.4 percent as if has 65.5 percent of its revenues coming from the domestic operations. It is higher as compared to the average operating margin of the top IT palyers from their domestic operations. These are few companies which have taken average of the booming domestic economy, and investors can surely look forward to them.
