— Ramesh Sharma

Change of guard: (From left) The President-designate, Nasscom, Mr Som Mittal, with the outgoing President, Mr Kiran Karnik, and the Chairman, Mr Lakshmi Narayanan, at a press conference in the Capital on Wednesday.

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New Delhi, Oct 3 Software association Nasscom today expressed concern over the steep appreciation in the rupee, saying while large IT companies were better placed to ease margin pressures through hedging and higher utilisations, it was putting a strain on BPOs and small and medium-sized firms.

“In the last quarterly results, although the rupee appreciated by 10 per cent the margins were not impacted to that extent, as companies took preventive action through currency hedging and increase in utilisation levels. However, the impact is more severe in the case of BPOs as most of their expenses are in rupee. Also, the small and medium-sized companies, which are constantly under cost pressure and have less levers to act on, are hit harder,” Mr Lakshmi Narayanan, Chairman of Nasscom, said at a press conference to announce the appointment of Mr Som Mittal as the association’s new President.

Mr Narayanan, however, pointed out that the industry was well on its way to achieve the target of $60 billion by 2010. Pointing out that industry did not foresee any slowdown in demand, he said, the recent initiatives on supply side would result in moderation in wage increase from next year.

“The demand continues to be robust, and companies are in a position to capitalise this demand,” he said.

Mr Narayanan said he was upbeat about the industry’s prospects, and added that the sector could tap an additional $50 billion by 2012, through innovation. “We can create an ecosystem where innovation thrives. There is a tremendous opportunity in areas such as gaming and animation. Also companies can use technology to export healthcare services outside India,” he pointed out.

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