Boston, MA 01/15/2013 (wallstreetpr) – Cisco Systems, Inc (NASDAQ:CSCO), which had achieved 37% expansion in the last fiscal year could not see the same growth in the current year. Cisco, whose revenues were highly driven by its Indian telecommunications, banking and financial services and media segments, cannot continue the same way on worries of volatile Indian currency and the forthcoming polls situation.
Cisco’s India Story
The US-based network equipment maker Cisco Systems, Inc (NASDAQ:CSCO), which draws nearly 20% of its revenues from the emerging markets like India, expects to see a growth rate of 7-13% to be contributed from these markets. The fact behind the tall dreams of Cisco is India’s recent plans to expand banking services to rural as well as remote areas, which in turn meant higher demand for Cisco’s equipment to aid networking of these bank branches. Apart from this, Cisco also has an upper-hand in the country’s telecom market, where as much as 60% of the deployed infrastructure is based on Cisco’s technology. Moreover, the company has positioned itself as a market leader in eight out of total 10 of its segments existent in India, including a major 75% market share in ENT router as well. This all numbers are a good account of the US major’s dominance in the emerging nation.
Evidently, Cisco Systems, Inc (NASDAQ:CSCO) witnessed a strong revenue growth in the last fiscal year ended in July 2013, but its progress declined from 50% growth in the first half of the year to 29% and 19% in the following last quarters of the year. The major contributor to the revenue stream remained telecom service providers, in spite of stubborn competition from the cheap Chinese gear makers such as ZTE.
What’s Hurting?
While India’s directive to digitize TV cable networks had helped its first-half revenue, but the rupee’s drastic fall resulted in expensive product prices and pull back from buying decisions in the second half. And, it will relevant to state that the rupee risk and the buying deferrals due to elections are still overshadowing.
