Factor analysis performance evaluation of listed companies in Indian IT industry

In an increasingly competitive environment, companies rely on performance measurement as a successful business tool to have the competitive advantage. In India, the IT industry has observed the phenomenal growth over the past decade thereby one of the main objectives of this research is to examine existing key performance indicators within the IT industry. To develop composite scores, top companies from the IT industry have been selected based on the five financial indicators for the year 2012. An empirical analysis has been done according to the factor analysis method. The five factors that establish the financial business performance in the hierarchical order of their contribution are: earning capability, business growth, operating efficiency, sustainability and business efficiency. Further the model has been established to evaluate their business performances. No company has occurred as the distinctively bad performer which means that the overall performance of the IT industry in India is good.