March madness cripples local IT market

CIOL Bureau
New Update

Is it the Tehelka aftermath or the controversy over fallout of the insider

trading in BSE, that is responsible for the current slump that the local IT

market, is currently witnessing? But the channel segment chooses to differ and

says the slowdown started much earlier and was a carry-over from the last

quarter when markets failed pick up after a very pathetic

October-November-December season.


Though the sales were expected to catch up after the Holi festivity, it never

happened. The budget also had nothing substantial for the hardware sector.

Dealers are also unanimous in stating that market performance was the worst this


"There was absolutely no recovery in the market after Holi. Things were

expected to be better after the budget, even this did not happen. In fact, sales

have gone down to such an extent that distributors have lowered targets and are

selling at much lower prices. Sales have fallen by almost 30 - 40 percent when

compared to the last quarter. Though the overall picture is gloomy there is

still hope," said SD Computers Ltd., (managing director) Harsh Vij.

Another major reason for the downturn in the Indian economy that is largely

dependent on the US economy, which is presently facing a downtrend. The slump in

IT sector can also be cited to the decline in government purchase and the lack

of substantial perks for the hardware sector, in the Union Budget.


According to Vintron Informatics Ltd., director (marketing) Manish Agrawal,

the JFM is going lower than expected. "This is the worst moth I have seen.

Sales usually hit the peak by the end of March. However sales, this time around

have been much lower than in the previous months. The slowdown has also affected

both the PC and the peripheral segment," he said.

OA Compserve Pvt Ltd’s head (marketing), GS Kohli says: "The market

situation was pathetic. Nothing has changed even after the budget. The budget

proposals have not led to any substantial decrease in prices. The usual rush

from the government as well as the corporate sector towards the end of March is

also missing. Sales have gone down by 30- 40 percent when compared to the last

quarter. There are not enough funds in the market to furnish the customers'


Keshav Madhav of Vidur & Co thinks the lack of orders from the government

in March has really dealt a blow to the market. "Usually what happens is

that the quantum of orders placed in March would normally outdo both the

previous months put together. But it has not happened this time, as orders are

not being withheld for fear of bouncing cheques."

But, Challanger Computers CEO Sunil Gupta, chooses to differ. Though he

agrees that the market has been dull over the past few months, according to him,

the sales are slowly picking up. The market sales have been affected only by

about five per cent. Samtech Infonet Ltd., MD Alok Gupta says the market has

been bullish in the telecom as well as the Internet sector. These two sectors

have seen a growth of 200% in the last year due to heavy investments. However,

the general IT markets is facing a slump as hardware manufacturing has seen a

considerable decline this year, he added.