Recently Rishad Premji, the Wipro chairman, said that the technology services industry, at some level, is recession proof. Will it really remain recession proof? Indian IT services companies have of course enjoyed constant growth in the last couple of years especially during the Covid-19 pandemic. For many IT services firms, digital revenue increased by around 25 per cent in FY22. As per rating agency CRISIL, the IT services will log double-digit revenue growth this fiscal, at 12-13 percent, driven by digitalisation, strong demand for new-age technologies and depreciation in the Indian rupee. However this will be in contrast to the 19 per cent growth that was achieved in the last fiscal by the segment. This will be the highest fall in the past eight years.
Experts with whom THE WEEK spoke to feel that there are challenges and opportunities for the sector in the coming year but the growth rate will be affected. Indian IT services sector has been a beneficiary of the Covid fall out and associated surge in technology investments. While the sector witnessed a significant growth coupled with enhanced profits, technology employee attrition during the last 18 months made deliveries difficult denting growth aspirations of the sector. World economic situation and the continuing uncertainty in Europe will haunt the sector with new customer acquisition not being easy while the renewals and maintenance contracts have seen margin pressures invariably,” remarked Subramanyam Sreenivasaiah, CEO at Ascent HR.