Better growth in IT services expected |
India`s IT services has been in great demand across the world and even as there is a slowdown in the economy, the sector`s revenue is expected to grow 6 to 8% in dollar terms in the current fiscal year, on continued demand for newer digital services from clients. According to data, IT firms reported higher deal wins in the preceding year, while net employee addition increased for a majority of companies, signalling stable demand for the IT services sector. IT firms added a net 1,13,787 employees in the fiscal year 2019, compared to 11,600 during fiscal year 2018. In February, industry body Nasscom forecast software exports to grow 9.2% to $137 billion in FY19. A survey has shown that a majority expected better growth this fiscal on the back of increasing demand from clients. Despite currency benefits and use of operating levers, profits remained flattish in FY19 at 22.5% due to higher onsite hiring and subcontracting costs on account of visa curbs, pricing pressure, increased regulatory costs and wage inflation. Operating margins are expected to be lower this fiscal due to higher costs, it said. “Demand is being driven by scaling up of solutions built around digital technologies, while traditional outsourcing services are increasingly becoming consumer oriented with application delivery mechanism shifting to cloud based environments.
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