Listed IT companies’ profits bounce back

Listed IT-based companies' profits bounced back strongly in the last six months after the initial shock of the pandemic.

Among 11 IT-based companies, 10 disclosed their financial reports. Profits of the companies surged 26 per cent year-on-year to Tk 77 crore in the July-December period of the current financial year of 2021-22.

"People thought that the sector had not been impacted during the pandemic but in reality we have also been affected," said Shameem Ahsan, managing director of eGeneration.

In the April-June period of 2020, when the coronavirus pandemic hit the country, profits of the IT-based listed companies dropped 33 per cent to Tk 18 crore compared to the same period of the previous year, according to data of Sandhani Asset Management.

In the same three-month period of 2021, their profits dropped further to Tk 15 crore when the second wave of the pandemic snared people's normal economic activities.

"As our clients were affected with the pandemic so we also felt the heat," it said.

"On the other hand, our IT-based companies were also impacted as many of us failed to bring hardware due to the supply chain disruptions," said Ahsan, who is also chairman of the Venture Capital & Private Equity Association of Bangladesh.

But the pandemic caused people to realise the importance of technology so they are either adopting or planning to adopt it, he said, adding that this caused the IT-based companies to bounce back strongly in the last six months. Number of internet users is rising too, he added.

The total number of internet subscribers increased by around 28 per cent to 12.66 crore at the end of November 2021 from that in January 2020, according to data of Bangladesh Telecommunication Regulatory Authority.

Among the 10 listed IT-based companies, seven saw a rise in profits while three logged lower profits in the period compared to that in the same period of the previous year.

Genex Infosys is the top profit-making company of the October-December quarter, logging profits of Tk 15 crore.

IT Consultants registered profits of Tk 6.5 crore while Aamra Technology Tk 3.8 crore.

"During the pandemic period, consumption of broadband rose so we hoped to see higher profits from such service providers," said Shekh Mohammad Rashedul Hasan, managing director and CEO of UCB Asset Management.

"We have a few listed broadband service providers whose future is good but the reality is the best service provider in terms of customers satisfaction cannot be realised," he said.

"I am super optimistic about the IT sector," he added.

If they can make foray into business process outsourcing and software development, they will be able to log extraordinary growth in profits, he said.

The export revenue from the IT sector was only $26 million back in 2008 and it crossed $1.4 billion in 2021, according to the Export Promotion Bureau.

Seeing the potentials, many companies and students are now rushing to the sector, he added.

Only 300 software companies and 50,000 people worked in this industry in 2008. Now, one million people are working.

Under the umbrella of the Bangladesh Association of Software and Information Services (BASIS), there are 1,700 plus companies and the number has almost doubled in the last five years.

The government has also ensured numerous support for the sector. It has declared 100 per cent tax exemption for the IT and IT-enabled service (ITES) companies until 2024.