Robust expansion for Indian IT in FY22

Consultation firm Fitch Ratings believes that Indian IT services companies will see a stronger revenue growth in the financial year ending March 2022 (FY22). It opines that the pandemic is not going to have any major setback for the sector in terms of revenue generation as revenue from India contributes only 4%-5% of the total revenue of these companies. It, however, adds that their operations may be affected if the number of COVID-19 patients keeps rising.

The consultancy has forecast top-tier Indian IT services companies, including Tata Consultancy Services Limited (TCS, A-/Negative), Infosys Limited, HCL Technologies Limited (A-/Stable) and Wipro Limited, to register a double-digit revenue growth in FY22.

“We expect Indian IT companies to expand faster than the industry average, as they have significant cost advantages compared with peers in the developed countries due to lower labour costs in India. We expect companies that focus on digital transformation to perform better than those in legacy IT businesses such as business process outsourcing, Fitch Ratings said.