Great scope for Indian IT cos on Eurpean soil: Study

By Staff
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Google Oneindia News

Mumbai, Feb 5 (UNI) Avendus, one of the leading investment banks in the mid-market segment, has advised Indian information technology firms to aggressively go for mergers and acquisitions on the European soil.

The recommendation is based on the third annual report on IT sector entitled ''European IT services: An industry primer'' prepared by the company. The report was released by company MD Ranu Vohra here today.

Briefing reporters, Mr Vohra said the European IT services market is expected to grow at a compounded annual growth rate (CAGR) of 5.8 per cent -- from USD 217 billion last year to USD 287 billion in 2010.

The market for offshore IT services is expected to grow at a CAGR of 60 per cent through 2009, presenting a huge opportunity to Indian IT services companies, he added.

He said that barring few, most Indian IT services companies have concentrated on the UK market and, so, have marginal presence in continental Europe which has a combined market size of USD 108 billion. In the absence of Indian IT companies, continental Europe is currently dominated by IT majors from US (IBM, Acenture, EDS), Pan European majors (CapGemini, Logica CMG), and a large number of mid-sized regional and local players, captive and smaller players like SBS, CSC, TietoEnator, Steria, Indra and others.

Later, talking to UNI on the sidelines of the media briefing, company vice president Ashish Bhinde wondered why Indian IT majors cannot go for acquiring 100 million euro dollars German SAP firms like EDS.

At a time when Indian IT bigwigs are vying to cross the mark of 4 billion USD this year, doing mergers worth USD 100 million should not be a big issue, he said.

Another Avendus official, Kaushal Agrawal, predicted five to six mergers and acquisitions on a big level by Indian IT companies this year.

The Avendus report also advises that Indian companies should develop localised strategies for each of the key European markets to ensure deeper penetration there.

UNI

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