South Indian IT players bullish about the Union budget

Expect the next quarter to bring more revenue

Union budget is round the corner and with this the expectations
of market players are also building up. Though because of Parliament elections
the market witnessed a brief silence in the first quarter but the policies and
statements of newly formed congress led government are giving high hopes to
traders. The factors like slashing of product prices, and stable economy have
also added to the aspirations. The keen interest of government in the IT
projects is a good news for resellers for example Tamil Nadu government has also
invited the tenders from channel partners to supply 10,000 computer systems for
its school project approved by ELCOT- the nodal agency of state government. So
overall, a good business and conducive environment is being expected by the
people connected with IT in one and another way

The market across South India has mixed reactions about AMJ
quarter and but high expectations from the forthcoming union budget as well as
from JAS quarter.

"AMJ was an average quarter for us in business. Even
though, April was an `okay' month, May and June scored well in terms of
doubling our sales and targets. We had registered close to 175 percent growth
mainly driven by end-users and corporate clients. Going by this trend, JAS
should be a fantastic quarter for us. Moreover, the budget is also going to be
presented and we have an expo in July, which will be a driving factor,"
said T Sivakumar, Director of Pondicherry-based Siara Systems.

However, Suresh Kumar Soni, Director, Auro Enterprises, who
belongs to the same region, has a different point to share, "AMJ was not an
exciting quarter for us. We did some good business in April, but it was a spill
over from March. However, May and the first two weeks of June took a bad hit and
only now, we are seeing some positive develop-ments. But, overall, AMJ was a
flop and now all hopes are only on JAS quarter with union budget and IT expo (in
Pondicherry) on the anvil."

Madurai as such is witnessing a phenomenal growth in business
and is all set to become the hub of the region. This is very much evident from
the fact that all distributors are setting up their shops here, with proper
warehouse facility. Now, Madurai is catering to nearby markets such as
Virudhunagar, Sivakasi, Theni, Nagercoil, Tirunelveli, Sivaganga, Rajapalayam
and Sattur.

"Home segment is the major contributor for this market and
Madurai should be growing at 30 percent year-on-year. For us, all the three
months in AMJ were good in business and home segment contributed a lot, while
SME segment showed signs of picking up. The market is also maturing where as
customers prefer to buy new technology solution such as Wi-Fi and mobile
products. Notebooks are doing well," said K Senthilnathan, Director of
Premier Systems & Peripherals. "I wish the government should not
disturb the present tax structure, even if not giving any sops for the IT
industry."

"We are barely meeting our targets in AMJ, but there is no
significant growth. However, JAS should be a better period as most of the
educational institutions' orders come during this time," said R Mahesh,
CEO of Coimbatore-based Ozone Computer Services. He feels excise duty should be
rationalized to promote more system integrators (PC assemb-lers) who can promote
their own brands and provide better warranty and service support to the
customers. "It can generate more employment in the market."

"It (AMJ) has been a sluggish quarter and all our hopes now
lie only on JAS. The government should invite, in the way of policies, more MNCs
to set-up their projects here which will create more employment and business
opportunities here," said G Suresh, Director of Coim-batore-based Ecaps
Computer India Pvt Ltd.

"Except for some local tax confusion, business was quite
good here. In AMJ, we did extremely well and this time, we changed our business
strategy by concentrating only on exclusive product range. In fact, it worked
out well and now JAS looks even more promising for us," said George Thomas,
CEO of Cochin-based AGTE. Expressing his hopes from the budget he added,
"The taxes should be completely dropped to keep our prices on par with the
global markets in IT and we can see more business happening in the local
markets."

"Although, AMJ is not exciting for us, but we expect JAS to
be good as Onam festival comes during this time. The festive sales will keep our
charts pushing upward," said Gokul Govind, Director of Thiruvananthapuram-based
Compu-Needs. He feels custom duty on laptops should be rationalized to promote
mobile products growth in the country.

"Retail sales was good during AMJ. We achieved more than 40
percent growth in this quarter and laptop contributed more for our growth, as it
is a high value product," said Suresh of Karthik Business Machines Pvt Ltd
in Bangalore.

"We registered 20 percent growth in AMJ when compared to
the corresponding quarter of the previous fiscal. We got major orders from PSUs
and government, which kept the momentum up. However, in our Visakhapatnam
branch, we saw home segment doing well during this quarter. Going by the present
trend, JAS should definitely be a much brighter period," said PK Chowdary,
CEO, Microcare Computers Pvt Ltd, based in Hyderabad. "I do not expect much
of sops for the industry, as the new government, this year, would focus more on
farmers and common people welfare measures."

In Vijayawada, MVK Hara Gopal, Director of Srinivasa Marketing
also, witnessed a good growth of over 25 percent in AMJ when compared to the
previous quarter. "Upcountry markets such as Vijayawada is showing good
potential for laptops and the buying trend is completely changing here. Now,
people do not mind about additional costs but they want to go for best and
latest technology products in the market. Even college students are showing
great interest in buying laptops as the prices have come down and available,
almost equivalent to hi-end PC price."

S Gopikrishna

Chennai