Resellers upbeat about business in coming fiscal

With just 10 days remaining in the financial closing of 2003-04, the market is quite upbeat about the next fiscal. The reasons are manifold: the Indian economy is doing well, GDP growth is on the rise, the capital market reflects investor confidence, FIIs bet on Indian companies, the FDI flow is good etc. Resellers in the local market believe that the IT industry is set for a growth of 30% to 40%.

At the same time, the industry is worried about the growing pressure on margins. "Business is poised for growth only in volumes, not in value terms. Even during slowdown period, we made some margins in business. But now, the sales chart shows an upward trend while margins are declining," points out Universal Microsystems' Director, R Kumar. 

Expansion into newer business segments and tapping large-scale companies is the only way out to earn profits and survive in the market. "Expanding business and increasing the turnover are the only ways to sustain in business," says Rakesh Jain of Supreme Computers. Although, he notes that the recent duty cuts will stimulate growth, this is likely to be topline growth while the bottomline remains the same. 

For many partners, 2003-04 was the year they made a turnaround in business and saw some growth, after two-three years of slowdown. Although the year was good overall, JFM failed to generate any excitement. Resellers have now pinned their hopes on the remainder of the fiscal to bring in a few orders.

"January was okay, but February and March were quite dull. Prospective buyers are delaying their buying decisions to avail of year-end discounts, as vendors try to achieve their targets. The coming fiscal will be better as the recent duty cuts have brought down prices of branded PCs," says SSS Systems' Director, Sadiq Batcha. He predicts that the branded segment will see a good growth, while the assembler marketshare will decline steeply.

MA Hasan of CSS Infotech agrees with him. "Branded machines are going to lead the market because of the narrow price difference separating them from assembled products. We hope business to grow by at least 15% the next fiscal," he adds.

The forthcoming elections will also make a difference in the way business shapes up in the coming fiscal. "We need a stable and proactive government which can put the country on the growth path and on the fast lane," says a peripherals reseller. A good reason for this is because the government is one of the major buyers followed by the BFSI and telecom. 

"The replacement market also looks promising with more latest technology products available at an affordable price," comments SLSP's Proprietor, Krishna Kumar. "Today, the state governments are spending heavily on e-governance projects in order to be more competitive and attract more foreign players with transparent and effective governance," he adds.

S GOPIKRISHNA

CHENNAI