IT INDUSTRY DROP DOWN

The misfortune of the IT bellwether Satyam will enable top-notch IT leaders to touch high grounds, with Infosys keeping a firm stand among the top. Analysts believe that the firm's high reputation in high corporate governance and its U.S. listing will make it a better choice for customers.

However, the hitch to this could be Infosys' premium pricing, which some analysts said was 10-15 percent higher than Satyam's rates. This, along with a substantial customer overlap, could work in the favor of the number one IT exporter, TCS. The stocks of the Infosys shoot up by 1.7 percent after the confession of Ramalinga Raju, to end at Rs.1,187, while for Wipro and TCS it ended at Rs.243.30 and Rs.503.70. Even HCL's stocks slid by around 15 percent after the revealation, reports The Economic Times. "The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende.

Some analysts also pinpointed that there will not be only one vendor benefiting by the Satyam case. Witnessing the overlap of clients, TCS also holds a good chance of leveraging its current market position. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for.

Cognizant can also have an edge over Infosys if it emphasizes its U.S. domicile status, as opposed to Infosys which is domiciled in India. IBM and Accenture, which have a significant offshore presence, also hold a good chance of being the biggest gainers. "We consider them of tier-1 caliber in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus. www.uniqueinstitutes.org