Indian IT Services Sector Projects Modest 3-5% Revenue Growth In FY25: ICRA Report

Indian IT Services Sector Projects Modest 3-5% Revenue Growth In FY25: ICRA Report

The credit rating agency also expects hiring to remain muted in the near term with gradual pick-up until the growth momentum improves.

IANSUpdated: Monday, March 18, 2024, 01:52 PM IST
article-image
Indian IT Services Sector Projects Modest 3-5% Revenue Growth In FY25: ICRA Report | Canva

The revenue growth of the Indian IT services industry is expected to improve mildly from 2 per cent in the nine months of the current fiscal year but remain modest at 3-5 per cent in FY2025, a new report showed on Monday.

Despite expectations of modest revenue growth, credit rating agency ICRA maintained its stable outlook on the Indian IT services industry, "led by a well-established business position, expectations of healthy earnings and cash flow generation, and strong balance sheets of the industry players."

"The banking, financial services and insurance (BFSI) and telecom segments have contracted more than the others. Nonetheless, critical spending and cost optimisation deals continue to gain traction, supporting the growth prospects for the Indian IT services companies to some extent," said Deepak Jotwani, Assistant Vice President and Sector Head, ICRA.

ICRA expects a likely pick-up in the growth momentum once the macroeconomic headwinds subside. The credit rating agency also expects hiring to remain muted in the near term with gradual pick-up until the growth momentum improves.

"Moreover, attrition levels are expected to stabilise over the near term, inching closer to the long-term average of 12-13 per cent, as overall slowdown in growth momentum and strong hiring in the previous fiscal has corrected the demand-supply mismatch witnessed earlier," Jotwani noted.

The Indian IT services industry continues to have a net cash surplus position with strong liquidity owing to high level of operating cash flows and modest capex and working capital requirements. 

RECENT STORIES

India Adds A Record 18 GW Renewable Energy Capacity In FY24

India Adds A Record 18 GW Renewable Energy Capacity In FY24

Property Of War: Fear Of Conflict Leads Eastern Europeans To Buy Real Estate In West Of The...

Property Of War: Fear Of Conflict Leads Eastern Europeans To Buy Real Estate In West Of The...

FPIs Pull Out ₹8000 From Indian Markets In A Day, Indices Stumble At Dalal Street

FPIs Pull Out ₹8000 From Indian Markets In A Day, Indices Stumble At Dalal Street

Make Your Travel Easy With These Apps

Make Your Travel Easy With These Apps

Why You Should Invest In Gold? Read On To Find Out More

Why You Should Invest In Gold? Read On To Find Out More