Midcap IT ready for shakeout?

Due to intense competition lately, it has become difficult for some of the IT companies to maintain their ROCEs. The companies are increasing their debt at an unprecedented rate for growth but are not able to earn proper returns on their invested capital. Have a look at some of them:

Company		3i Infotech	Geodesic	Core Projects	FirstSource	Cranes
	Year
Debt	2005	141.86	0.23	0.82	91.72	115.56
	2006	315.38	0.26	1.1	120.97	323.73
	2007	546.01	0.19	0.31	72.09	461.42
	2008	1262.1	506.79	167.66	1124.14	572.86
	2009	1520.98	640.97	225.57	1342.74	743.25
ROCE	2005	8.57	34.49	NA	3.16	25.72
	2006	7.1	22.07	NA	8.01	14.5
	2007	6.73	30.68	17.48	8.91	14.04
	2008	7.25	14.36	11.86	5.43	13.71
	2009	9.73	19.23	14.96	5.82	11.7

According to what I understand, anything below 15% for two or more years leads to debt spiral where company keeps increasing its debt to fund growth and the interest outgo will keep eating into profits. Some of the above companies have expanded their debt by more than 10 times in last 5 years. This really is unprecedented and may signal what is coming in the future for IT sector.