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India's IT firms expect continued growth amid shift to new tech
[BANGALORE] India's software services industry expects growth of as much as 9 pe cent in fiscal 2019 as Tata Consultancy Services Ltd. and its peers strengthen automation and adapt to the rapid onset of digital technologies.
Sales will rise 7 to 9 per cent in constant currency terms in the fiscal year ending in March 2019, the National Association of Software and Services Companies, or Nasscom, said Tuesday at its annual meeting in the southern city of Hyderabad. In the current financial year, revenue from the industry will rise 7.8 per cent to US$167 billion.
India's IT industry, led by Tata, is groping for a new business model as automation and artificial intelligence upends decades of billing customers for hourly work. That's being compounded by uncertainty over visas in the US, the industry's largest market, where politicians as well as lobby groups are demanding protectionist policies.
"The current outlook is cautious optimism," R Chandrashekhar, president of Nasscom, said at a media briefing. "There is still some turbulence and it is not clear how some of the known uncertainties will play out, however FY 2019 is likely to be a better year, based on our current assessment." Nasscom's 2,400 members include Infosys Ltd. and Wipro Ltd.
Until a couple of years ago, even the biggest IT services companies grew at double digit rates and hired by the thousands as they provided software services for companies including Citigroup Inc. and General Motors Co. Nasscom's Mr Chandrashekhar said the Indian sector, which likely hired 100,000 net additional people in the current fiscal year, is now in a better position to capitalize on demand for digitized services from its clients. Digital revenues are set to grow at 1.5 to 2 times the rest of the business, he said.
Shares of Tata Consultancy, India's biggest outsourcer, and No. 2 player Infosys rose about 1 per cent.