HOME     MENU     SEARCH     NEWSLETTER    
NEWS & INFORMATION FOR TECHNOLOGY PURCHASERS. UPDATED 10 MINUTES AGO.
You are here: Home / Press Releases / India Tier I IT Companies: Revenue Up
Druva Endpoint Backup:
Enterprises Realize Simple Secure Backup with Druva
www.druva.com
India Tier I IT Companies: Revenue Up 25.76 Percent
India Tier I IT Companies: Revenue Up 25.76 Percent
News as reported by the company Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
SEPTEMBER
28
2012



India Tier I IT Companies: Revenue Up 25.76%, Enterprise Value Down 16.53% -- Twelve Month Analysis Also Reveals Tier II companies increased sales 17.88% with a 16.07% Decline in Enterprise Value

Bangalore, India, September 27, 2012 -- In the past 12 months, September 2011 to September 2012, India IT companies have increased sales while EV/EBITDA (Enterprise Value/EBITDA) have declined. The analysis further shows that Indian Tier I IT companies have had sales growth of 25.76 percent, and a profit increase of 16.53 percent, while EV/EBITDA has declined 12.48 percent. Tier II companies have increased sales 17.88 percent and profits 15.77% with a 16.07 percent decline in EV/EBITDA*. martinwolf Global M&A Advisors conducted the analysis as preliminary findings in its MW India IT Index.

The results underscore the fact that there is a going to be a new fight for growth and relevancy for India's IT companies. India's IT companies are at an inflection point. In the past, they have been able to sit "inside India" and serve the world through better, cheaper, faster services as we have seen in the explosive growth in BPO in the past decade. The inflection point of declining value suggests that India IT companies "inside India" strategy will result in working harder and getting nothing or little in return.

According to Marty Wolf, CEO of martinwolf Global M&A Advisors, "It begs the question, where can India IT companies find value. The answer is outside India, and oddly enough inside India. But, also what a company does matters in determining value. Highly specialized IT services that are less than $500M in sales can realize a very attractive valuation. And, a large multi-national IT service company like IBM, or SAP in managed services and infrastructure today is worth more than a global BPO organization," he said.

The martinwolf Global M&A analysis of global IT deals in the past year bear this out. For example, BPO companies (voice) sold for 4.7x EBITDA, while Managed Services & Infrastructure Services companies were sold at 15.6x EBITDA, or 3.3 times more than BPO. So, what a company does matters. And, smaller, specialized vertical niche players like Healthcare IT Services companies were sold at 11.7x EBITDA, versus 9.5x EBITDA for Financial IT Services both outpacing valuations of much larger BPO companies.

Size affects valuation as well. Offshore companies exceeding $500M in sales garnered 10.8x EBITDA, versus 5.1x EBITDA for those with revenues less than $500M.

Wolf added, "If you are an IT company what you do matters, and scale matters. When we say, what you do matters, it matters in terms of the type of IT services company you are, and the vertical business segment you service. (continued...)

1  2  Next Page >

Tell Us What You Think
Comment:

Name:

Like Us on FacebookFollow Us on Twitter
TOP STORIES NOW
MAY INTEREST YOU
Barium Ferrite Is The Future Of Tape: Barium Ferrite (BaFe) offers greater capacity, superior performance, and longer archival life compared to legacy metal particle (MP) tape. Click here to learn more.
MORE IN PRESS RELEASES
Product Information and Resources for Technology You Can Use To Boost Your Business

NETWORK SECURITY SPOTLIGHT
Using Internet-connected devices without strong passwords is inherently risky, as illustrated by reports that a Russian Web site is showing live footage from thousands of people's webcams.

ENTERPRISE HARDWARE SPOTLIGHT
Doctor Who had K-9, the robot dog that accompanied him on adventures through space. Now, Mountain View has K5, a 5-foot-tall, 300-pound robot security guard patrolling in the Bay Area.

MOBILE TECHNOLOGY SPOTLIGHT
To better its customer service, Comcast is pulling out at least some of the stops. The cable giant has launched an app so you can track the cable guy in real time. It's designed to ease customer frustration.

© Copyright 2014 NewsFactor Network, Inc. All rights reserved. Member of Accuserve Ad Network.