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Company : Goldman Sachs 
Tuesday, September 26, 2000 2:52PM IST (9:22AM GMT)
Survey forecasts 39 per cent compound annual growth rate for next four years
New Delhi, Delhi, India

Goldman Sachs, the global banking and securities firm, has forecast that the Indian IT (information technology) sector will capture five per cent of the global IT services market by 2004, with a compound annual growth rate (CAGR) of 39 per cent. Currently, India accounts for only 1.6 per cent of the international IT services market.

In a 197-page survey and analysis of India in the global IT services market, the Goldman Sachs Asian Technology Research Team concludes that though India's piece of the large and growing global IT services pie is still small, it is well positioned to capitalise on the ‘e-volution' as IT companies are reinventing themselves for the technology cycle, diversifying both customer and revenue streams.

Anil Tewari, securities analyst with the Goldman Sachs Asian Technology Research Team, says, "Given India's large talent pool and its increasingly conspicuous credibility in high-quality solutions, we see tremendous upside opportunity. We have rated NIIT Ltd as a ‘Market Performer' and recently initiated coverage of Infosys Technologies and HCL Technologies, which are possibly among the highest quality names in the industry."

The report points out, however, that key challenges before the Indian IT services sector will continue to be to sustain the present strength in growth rates and quality of execution, and the risk of slow rate of growth in infrastructure development and political uncertainty.

Global spending on IT services was US$349 billion in 1999, of which India grossed US$5.7 billion. Goldman Sachs estimates that while international outlay on IT services will increase to US$585 billion by 2004, India will, at a "conservative estimate", capture US$30 billion of this market.

Goldman Sachs is one of the world's leading investment banks, prominent in virtually every field of investment, finance research, as well as mergers and acquisitions. Founded in 1869, the New York-based firm has become a global business with regional headquarters in London, Tokyo and Hong Kong and a network of 41 offices in 23 countries. It employs around 18,500 people, drawn from more than 80 countries.

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