New Report Forecasts Slight Uptick in Indian IT Services Industry Revenue Growth to 3-5% in FY2025.
Despite the modest growth projection, the credit rating agency ICRA maintains a stable outlook for the Indian IT services sector. This stance is underpinned by its solid market position, anticipation of robust earnings and cash flow, and the resilient financial standing of industry players.
Deepak Jotwani, Assistant Vice President and Sector Head at ICRA, highlighted that while the banking, financial services, and insurance (BFSI) and telecom sectors have faced contraction, ongoing investments in essential areas and cost-saving initiatives are providing some support to the growth trajectory of Indian IT services firms.
ICRA anticipates a potential acceleration in growth once the prevailing macroeconomic challenges ease. Additionally, the agency expects recruitment activities to remain subdued in the short term, gradually picking up as growth prospects improve.
Jotwani further observed that attrition rates are likely to stabilise in the near future, moving towards the long-term average of 12-13%. This adjustment is attributed to the overall slowdown in growth momentum and substantial hiring observed in the previous fiscal year, which helped address earlier demand-supply imbalances.
Notably, the Indian IT services industry maintains a positive cash position and solid liquidity, supported by healthy operating cash flows and modest capital expenditure and working capital needs, according to Free Press Journal.
(Finance World and The Free Press Journal have published the article under a mutual content partnership arrangement.)
