IT services companies are expected to log dollar revenue growth of 9-12% in FY22, driven by accelerated demand for digital technologies from enterprises globally and partly on account of last year’s low base due to the COVID-19 impact, ratings agency ICRA said.
Industry growth is expected to moderate marginally to 6-9% in FY23, partly also on account of the base effect, ICRA said on Tuesday.
“In line with the growth trajectory witnessed over recent quarters, Indian IT services companies are expected to report healthy growth over the near term due to aforementioned favourable factors,” ICRA Assistant Vice-President and Sector Head Deepak Jotwani said.
He added that the growth had been supported by uptick in all key verticals such as BFSI, telecom, manufacturing, retail and distribution.
However, concerns have emanated from elevated attrition levels due to strong demand for digital technologies and lack of adequate skilled manpower to service the same. Firms are reskilling employees to overcome this challenge.
Moreover, they have also been able to achieve higher employee productivity through increased deployment of technology.
Hiring by IT companies is at an all-time high buoyed by strong demand and net addition over past four quarters has been increasing exponentially, Mr. Jotwani noted.
ICRA said IT services companies remain focused on enhancing the share of fixed price contracts as it assures better revenue visibility.
