5 1103 1160 1218 1275 20 1062 1120 1175 1237 1295 22

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: nk Figure 19: Sensitivity of HCL Tech’s FY15E EPS to changes in exchange rates --------------------Curr (apprn)/deprn-------------------------10% -5% DBe 5% 10% INR/USD Blended volume growth FY15E 53.8 56.8 59.8 62.8 65.7 6% 76.3 77.8 79.4 80.8 82.3 8% 77.2 78.7 80.3 81.7 83.3 10% 78.0 79.6 81.2 82.7 85.2 12% 78.9 80.5 82.2 83.6 85.2 14% 79.8 81.4 83.1 84.6 86.2 Source: Deutsche Bank Deutsche Bank AG/Hong Kong Page 15 7 January 2014 Software & Services Indian IT Services US immigration bill a key risk to our positive view Recent versions of the bill relatively benign for Indian IT vendors Comprehensive Immigration Bill in the USA with its restrictive outplacement provisions, if passed, will result in effectively disrupting the offshore services delivery model of the Indian IT services companies. In addition, tightening visa processes and heightened visa rejection rates increase the cost of operation. However, the recently amended House subset of the US Border Security, and Immigration Modernization Act 2013 (in the form of Skills Visa Act) has done away with: (a) onerous outplacement restrictions and (b) larger wage increases for H1B dependent employers (even though it raises prevailing wage standards overall). It increases visa fees but without additional fees or limits on high volume H1B or L visa employers. Possibility of ‘draconian’ outplacement provision getting through Congress is remote If the outplacement restrictions go through, critical IT projects of a majority of Fortune 2000 US corporations could get disrupted. With costs going up and service disruptions, it would compromise US corporations’ ability to compete. With the US unemployment rates for technology professionals being low, a smooth transition from Indian H1B holders to resident US technology seems unlikely. Figure 20: Unemployment rate in USA – Tech vs. Figure 21: Technology subsector unemployment rates headline (Q3CY13 , %) Headline Unemployment rate (%) 9 8.2 12 8.2 8.0 8 7.8 7.7 7.5 9.7 10 7.4 7.5 8 7 6 6 5 Technology Sub sector unemployment rates (Q3CY13 %) Unemployment rate for technology professionals (%) 4 2 4.4 3.6 4 3.3 3.3 3.5 3.6 3.9 1.7 1.8 2.3 2.4 2.9 3...
View Full Document

Ask a homework question - tutors are online