IT Education: Tough times - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

IT Education: Tough times

Jun 26, 2001

Information technology training and education business is traditionally a seasonal business with the second quarter (April to June) of the year being the best for the companies. This is due to the fact that during this part of the year most of the schools and colleges are closed for vacations and students opt for computer courses. Also, with colleges starting in June students simultaneously enroll for long-term software courses. However, it seems this year the quarter has been below par for the software education majors. The signs of trouble were apparent quite early as NIIT declared its result for the quarter ending March. The company hinted that it had seen a dip in inquires. Sometime after that Aptech too admitted that there was a drop in registrations. However, these companies have not given out specific numbers.

The companies claimed that the drop registrations were due to the slump in the IT job markets and more so due the hype created by the media about its implications. With the slowdown in the US economy, recruiting in the IT sector has been cut down. According to the figures released by ITAA (Information Technology Association of America) in April the demand for new technology workers in the year 2001, is down by approximately 0.7 m (44 percent) compared to the figures for 2000. As a result aspirants were having doubts about choosing IT as a career option.

(Rs m) Sep-Dec Jan-Mar Apr-June Jul-Sep
1998-1999 710 1,234 1,293 1,571
Growth (QoQ) -41.0% 73.8% 4.8% 21.5%
Growth (YoY) 49.5% 28.7% 14.9% 30.6%
1999-2000 981 1,272 1,856 2,143
Growth (QoQ) -37.6% 29.7% 45.9% 15.5%
Growth (YoY) 38.2% 3.1% 43.5% 36.4%
NIITís global revenues from learning business

According to these companies, the trend was quite surprising as most of the students of the career oriented courses were college students who would take at least a year or more to complete these courses and would not be looking for a job immediately as they would have to complete their college.

The drop in the demand could be attributed to the non-formal education sector being unable to assure a placement to the candidates. Another very critical reason could be the fact that the students who complete these courses need additional training when they join the industry therefore, the industry in weary to offer jobs. It is also quite possible that seeing the uncertainty in the job market students are looking at cheaper courses from non-branded institutes. All this is adding to the woes of the industry majors.

The companies in their own way have fought back. NIIT came out with an advertisement that was aimed specifically at allaying fears about getting a job in the IT industry. The advertisement gave numbers on the demand for IT professionals in countries other than the US. NIIT is also introducing courses in emerging technologies that it feels will help it counter the slowdown. And of course, there is the effort to increase reach of the company to bring in additional revenues.

However, with uncertainty prevailing, the tough times for these companies are expected to continue. The cue the companies could take from the slowdown is that there is still lot to be done when it comes to deliverables in the learning business. These companies have created brands that have attracted students, have they created brands that attract companies for placement, even in a tough environment? This is one hard fact they need to look at that in a country like India the success of a course is linked to the kind of placement it offers.


Equitymaster requests your view! Post a comment on "IT Education: Tough times". Click here!

  

More Views on News

MPHASIS at All Time High; BSE IT Index Up 0.8% (Market Updates)

Sep 18, 2020 | Updated on Sep 18, 2020

MPHASIS share price has hit an all time high at Rs 1,393 (up 2.3%). The BSE IT Index is up by 0.8%. Among the top gainers in the BSE IT Index today are MPHASIS (up 2.3%) and ORACLE FINANCIAL (up 0.2%). The top losers include ZENSAR TECHNOLOGIES (down 0.4%) and CYIENT (down 0.6%).

MPHASIS at All Time High; BSE IT Index Up 0.6% (Market Updates)

Sep 18, 2020 | Updated on Sep 18, 2020

MPHASIS share price has hit an all time high at Rs 1,374 (up 1.3%). The BSE IT Index is up by 0.6%. Among the top gainers in the BSE IT Index today are MPHASIS (up 1.3%) and ORACLE FINANCIAL . The top losers include PERSISTENT SYSTEMS and CYIENT (down 0.4%).

QUESS CORP. LTD Share Price Up by 5%; BSE IT Index Up 0.5% (Market Updates)

Sep 18, 2020 | Updated on Sep 18, 2020

QUESS CORP. LTD share price is trading up by 5% and its current market price is Rs 455. The BSE IT is up by 0.5%. The top gainers in the BSE IT Index is QUESS CORP. LTD (up 5.0%). The top losers are INFOSYS (down 0.1%) and TATA ELXSI (down 0.1%).

MINDTREE at All Time High; BSE IT Index Up 0.1% (Market Updates)

Sep 18, 2020 | Updated on Sep 18, 2020

MINDTREE share price has hit an all time high at Rs 1,290 (up 0.5%). The BSE IT Index is up by 0.1%. Among the top gainers in the BSE IT Index today are MINDTREE (up 0.5%) and ORACLE FINANCIAL (up 0.1%). The top losers include L&T TECHONOLOGY and INFOSYS (down 0.2%).

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE IT


Sep 18, 2020 (Close)

S&P BSE IT 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS