Now, Indian IT cos top profit charts

Indian service vendors Cognizant, Satyam, Patni, TCS, Infosys, HCL Tech and Wipro came among the ten fastest-growing IT services vendors in the top 50 rankings last year, besides those focused on the lucrative US central government and defense sector, says a new research by independent market analyst Datamonitor.
India's big IT services companies ranked as the most profitable suppliers in the top 50 rankings in terms of both net and operating profit margin.
Datamonitor puts the size of the IT services market (including applications, infrastructure, consulting, and BPO services) at $513bn in 2005, meaning that the 50 largest vendors claimed a share of 51per cent. There was little change at the top of the rankings, with IBM, EDS, Fujitsu and Accenture again placed one to four, although BT Global Services overtook its German peer T-Systems to take eighth spot. However, India's five largest players all made significant moves up the league table, growing their combined sales by 35 per cent to $9.3bn. India's big IT services companies also ranked as the most profitable suppliers in the top 50 rankings in terms of both net and operating profit margin. This is due to the lower salary costs in India, which can be as much as 50 per cent lower for some skills over comparable rates in the US. Infosys was the most profitable supplier in terms of net profit margin with a 26 per cent in its most recent fiscal year, ahead of Satyam with 23per cent and TCS with 22per cent. The research found that the world's 50 largest IT services vendors booked combined revenue of $262bn last year, but grew at a slower rate than the overall market. The combined headcount of the top 50 vendors grew 18per cent to 1.58 million last year, driven by aggressive recruitment in low-cost countries such as India. Conducted annually, results from Datamonitor's research “Global IT Services Top 50 Rankings,” add weight to the belief of many industry watchers that some of the sector's larger players are losing out to smaller, more focused vendors.
The combined headcount of the top 50 vendors grew 18per cent to 1.58 million last year, driven by aggressive recruitment in low-cost countries such as India.
The vendors, which ranged from IBM Global Services with sales of $47bn to Patni Computer Systems with $450m, increased their combined sales by 1.9 per cent over the previous year. But this is well below the 8 per growth in the overall market for external IT services expenditure recorded by Datamonitor. Datamonitor ranked the top 50 suppliers based on their revenue figures reported in their most recent fiscal years. The numbers used are the “as reported” figures in annual results statements, and are not adjusted for foreign exchange movements, disposals or acquisitions. The list excludes companies that make the bulk of their revenues from reselling products, and captive IT operations that make the majority of their revenue from their parent organizations. The study estimates the size of the global IT services market at $513bn in 2005, meaning that the 50 largest vendors claimed a share of 51 per cent. The largest player, IBM Global Services accounted for a 9 per share, highlighting the relatively fragmented state of the marketplace. For the year 2006, the survey predicts more M&A activity that is likely to alter the very shape of the top 50 rankings.