vitbs it report
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Market Analysis of IT Sector in India...!!TRANSCRIPT
VIT BUSINESS SCHOOL
Market Analysis of IT
Sector Product Development and Services
Abirami.R,M.S.Dharma Vibhushan Raja, P.V.Krishna Teja, Suryakumar T
Contents VIT Business School ..................................................................................................................................... 3
Introduction to IT Sector ............................................................................................................................... 4
IT Market Trend ............................................................................................................................................ 5
Market share ................................................................................................................................................. 6
Interpretations ........................................................................................................................................... 6
Employee-Turnover ...................................................................................................................................... 7
Interpretations ........................................................................................................................................... 7
Labor- Capital Ratio ..................................................................................................................................... 8
Interpretations ........................................................................................................................................... 8
Prediction of share prices .............................................................................................................................. 9
Wipro ........................................................................................................................................................ 9
TCS ........................................................................................................................................................... 9
Larsen and Toubro .................................................................................................................................. 10
Interpretations ..................................................................................................................................... 10
Forecasting of share prices .......................................................................................................................... 11
Wipro ...................................................................................................................................................... 11
TCS ......................................................................................................................................................... 12
Larsen & Toubro ..................................................................................................................................... 12
Interpretations ..................................................................................................................................... 13
VIT Business School
VIT University was established in 1984 by well-known educationalist and former
parliamentarian, Dr. G. Viswanathan, Founder and Chancellor. Dr. V. Raju, Former
Professor of State University of New York, USA, currently the Vice Chancellor, Dr. Anand
A. Samuel, Pro-Vice Chancellor. Chennai Campus is in Vandalur-Kelambakkam Road.VIT
University has more than 17 Bachelor’s and 32 Masters’ programmes, 29000 (including 1000
foreign students from 44 countries) and 4000 faculty members
Accreditation:
The National Assessment and Accreditation Council (NAAC) of the University Grants
Commission (UGC) has accredited the university with a 'A'.
The Institution of Engineering and Technology (IET), and the Energy Institute, UK have
audited the teaching-learning processes at VIT and accredited the programmes in 2004, with
the highest validity of five years
Programmes at VIT are accredited by the Institution of Engineers, India (IEI).
The Accreditation Board for Engineering and Technology (ABET) of the USA accredited the
Civil, Mech, CSE, biomedical, ECE, EEE programmes.
VIT Business School, under the aegis VIT University has created a niche for itself as an
institution promoting excellence in management education and research with Dr. M J Xavier as
its Executive Director.
Introduction to IT Sector
Information technology (IT) is the application of computers and telecommunications
equipment to store, retrieve, transmit and manipulate data, often in the context of a business or
other enterprise.
IT is both a huge industry in itself and the source of dramatic changes in business practices in all
other sectors. The term IT covers a number of related disciplines and areas, from semiconductor
design and production (also covered in the profile of the electronics sector), through hardware
manufacture (mainframes, servers, PCs, and mobile devices), to software, data storage, backup
and retrieval, networking, and, of course, the Internet.
The software industry includes businesses for development, maintenance and publication of
software that are using different business models, mainly either "license/maintenance based" (on-
premises) or "Cloud based". The industry also includes software services, such
as training, documentation, and consulting.
IT Market Trend
According to a press release by IT market analysts Gartner in January 2014, worldwide IT
spending grew by 0.4% to US$3.7 trillion in 2013. Gartner projected growth of 3.1% in 2014 to
US$3.8 trillion.
Growth in spending by businesses on software continues to be the strongest trend throughout the
forecast period. Gartner sees this sector growing by 6.8% in 2014. It added that customer
relationship management and supply chain management (SCM) have already experienced a
period of strong growth
For comparison, market research firm International Data Corporation (IDC) predicts that the
growth in global IT spending will slow to 4.6% in 2014, down from an earlier forecast for the
year of 5%. IDC summarized its forecasts for 2014 in a press release published in February 2014
announcing a new edition of its “Worldwide black book,” which forecasts IT spending in 54
countries around the world, focused on 25 individual market segments across hardware,
software, IT services, and telecom services.
The main reasons for the downward revision, according to IDC, are the economic slowdown in
emerging markets (with currency devaluation and inflation inhibiting business confidence), plus
what it terms an inevitable deceleration in the “massive” growth of smart phones and tablets.
Although overall industry growth has cooled, some areas of IT spending are growing rapidly as
businesses in the mature economies (including the United States and Western Europe) begin to
invest in overdue infrastructure upgrades and replacements, according to the report. In 2014,
spending on servers will increase by 3% (after a decline of 4% in 2013) and spending on storage
will grow by 3% (following a 0.5% decline in 2013). The PC market is showing tentative signs
of stabilization, with improving commercial shipments in mature markets. The increased pace of
investment in hardware will have a positive effect on the revenue of IT service providers, which
is forecast to grow by 4% in 2014 (up from 3% in 2013). Business software spending remains
strong, with growth expected in the range of 6% to 7% in 2014.
Market share
"Market share is the percentage of a market (defined in terms of either units or revenue)
accounted for by a specific entity." In a survey of nearly 200 senior marketing managers, 67%
responded that they found the "dollar market share" metric very useful, while 61% found "unit
market share" very useful.
Interpretations
From the above pie-chart of market share, it is inferred that IBM occupies the largest
share of Indian share market with market capital of 193.7 $bn followed by TCS 82.45$bn and
Wipro stands in 7th position with market capital of 22.92$bn.
Employee-Turnover
Turnover or staff turnover or labour turnover is the rate at which an employer loses and
gains employees. Simple ways to describe it are "how long employees tend to stay" or "the rate
of traffic through the revolving door". Turnover is measured for individual companies and for
their industry as a whole. If an employer is said to have a high turnover relative to its
competitors, it means that employees of that company have a shorter average tenure than those of
other companies in the same industry.
Interpretations
From the above graph of employee turnover, it is visible that IBM has the most number of
employees of 4,31,210 succeeded by TCS with 3,00,460 employees, whereas WIPRO stands in
5th position.
Turnover 0
100
200
300
400
500
Turnover
Employees
Labor- Capital Ratio
Capital to Labour ratio measures the ratio of capital employed to labour employed.
Interpretations
From the above graph, CTS has the most number of employees i.e., 150K+ but less market
capital whereas TCS has less employees & high market capital.
0 50 100 150 200
TCS
Infosys
Wipro
HCL
Tech Mahindra
CTS
MindTree
Hexaware
Employees(K)
Market Capital(Billion $)
Prediction of share prices using WEKA software
Weka is a collection of machine learning algorithms for data mining tasks, Weka is used
here to forecast the share price of Wipro,TCS and L&T using data of the last traded price. The
forecast uses data of previous month. Horizontal axis indicates the last traded share price. The
bold red line indicates the last trade price until available data, and the jotted lines indicates the
predicted price.
Wipro
TCS
Larsen and Toubro
Interpretations
From the above prediction, it is inferred that price drops sporadically and then recovers gradually
for WIPRO, for TCS the price drops gradually. L&T price value has ups & downs.
Forecasting of share prices using SPSS software
SPSS Software package was used for statistical analysis of data using dependent and
independent variables to forecast the share price of Wipro,TCS and L&T. Different variables
such as last traded price, Opening price, High price were used to forecast the share price. Data
for analysis was taken for a period of 3months prior to analysis. The blue line indicates the actual
opening price of the share whereas the red line indicates the forecasted price.
WIPRO
420
440
460
480
500
520
540
560
580
600
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63
Estimated Price
Actual Price
TCS
Larsen & Toubro
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63
Estimated Price
Price
Interpretations
From the above graphs, it is clear that the level of accuracy for the forecast of price was
high in all the three cases.
WIPRO-93.1%
TCS-98%
Larsen & Turbo-99.4%
0 200 400 600 800
1000 1200 1400 1600 1800 2000
01
-May
-14
08
-May
-14
15
-May
-14
22
-May
-14
29
-May
-14
05
-Ju
n-1
4
12
-Ju
n-1
4
19
-Ju
n-1
4
26
-Ju
n-1
4
03
-Ju
l-1
4
10
-Ju
l-1
4
17
-Ju
l-1
4
24
-Ju
l-1
4
31
-Ju
l-1
4
07
-Au
g-1
4
Original Price
Forecasted Price
Conclusion
IBM occupies the largest share of Indian share market with market capital of 193.7 $bn
followed by TCS 82.45$bn and Wipro stands in 7th position with market capital of 22.92$bn.
IBM has the most number of employees of 4,31,210 succeeded by TCS with 3,00,460
employees, whereas WIPRO stands in 5th position.
The level of accuracy for the forecast of price using SPSS was high in all the three cases.
WIPRO-93.1%
TCS-98%
Larsen & Turbo-99.4%
Bibliography www.moneycontrol.com www.wikipedia.com www.tcs.com www.wipro.com www.fundoodata.com www.qfinance.com/sector-profiles/information-technology www.equitymaster.com
For Further details Contact: Dr P James Daniel Paul, Professor, VIT- BS, Chennai, [email protected] Tel: +91 44 3993 1040 HP: +91 98402 94590
Abirami.R,Student,VITBS,Chennai,
M.S.Dharma Vibhushan Raja,Student,VITBS,Chennai,
[email protected],+919989935127
P.V.Krishna Teja,Student,VITBS,Chennai,
[email protected],+919000919276
Suryakumar.T,Student,VITBS,Chennai,
[email protected],+919962761632