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Tech Industry: Latest Entrants to the ‘Billion Dollar Club’
Tech Industry: Latest Entrants to the ‘Billion Dollar Club’

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Despite challenges the world is facing, the technology industry has been at the forefront of India's growth story. The industry's value proposition is powered by the availability of abundant young talent pool, evolving physical and digital infrastructure, thriving domestic market, and strong government support.

 

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In FY2023, India’s technology industry revenue including hardware is estimated to cross $245 Bn (8.4% y-o-y growth), an addition of $19 Bn over last year. Exports, at $194 Bn, are expected to grow at 9.4% in reported currency terms, and 11.4% in constant currency terms. Domestic technology sector is expected to reach $51 Bn, growing at 4.9% y-o-y. In rupee terms, domestic tech revenues is expecting a 13% y-o-y growth on the back of continued investments by enterprise and the government.

 

The New Billion-Dollar Companies

The Tech industry which consists of different categories of players including Indian TPVs, MNC, GCCs, SMEs and start-ups, in the second half of FY2023 witnessed three Indian public listed technology companies join the prestigious billion-dollar club - LTIMindtree, Coforge, and Persistent systems.

 

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The Dawn of a New Era

Persistent which was founded in 1990 took 33 years to reach $1 billion in revenues. Coforge, formerly called NIIT Technologies, started as an independent firm in 2004 while L&T Infotech (LTI) merged with Mindtree in 2022, making the combined entity the fifth-largest IT services company in India in terms of market capitalization.

 

LTIMindtree, Coforge, and Persistent systems joining the bars with billion-dollar companies.

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  • Revenue & Margins: LTIMindtree's revenue surpassed $1 billion, after the merger of LTI and Mindtree in Q3FY23. Among the three new entrants into the billion-dollar club, LTIMindtree led margins at over 13% in FY2023. In terms of revenue growth, Persistent systems was in the lead with an annual growth of over 35% followed by LTIMindtree and Coforge.
  • Verticals: In terms of verticals for Persistent systems, Software, Hi-Tech, and Emerging Industries made up 48% of overall revenue and BFSI accounted for 31% and 37% of revenues for Coforge and LTIMindtree respectively in Q4FY23.
  • Geography: USA continues to be the largest market for Coforge, Persistent systems, and LTIMindtree, accounting for more than 50% of their revenues from this region.
  • Headcount: In terms of headcount, Persistent systems witnessed an increase of 23% y-o-y, followed by LTIMindtree and Coforge with an increase of 6% and 3% y-o-y respectively.

 

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These firms form the backbone of the mid-tier tech companies in India. I will analyse and share details about their growth strategies and what sets them apart in subsequent blogs.

For more detailed analysis on the quarterly financial performance of public listed tech companies download nasscom’s Quarterly Industry Report for Q4FY23

 

Sources:


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Prajwal Pandey
Research Analyst

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