New Delhi [India]April 5 (ANI): According to a report by Systematix Agency Research, the information technology sector in India is expected to report growth in the fourth quarter of fiscal year 25 (the January-March period).
The report attributes this slowdown to seasonal weaknesses and reduces discretionary spending on digital transformation projects for customers around the world.
“We expect IT Services companies to report growth in our coverage over the 4QFY25 period regarding seasonal weaknesses and lower discretionary digital transformation spending,” it said.
It also mentioned that Indian IT companies that have made substantial revenue from the U.S. market continue to face a challenging business environment as the U.S. deals with macroeconomic uncertainty.
Just as the industry hopes to be able to restore discretionary technology spending, the report notes that the situation has been compounded by a brand new tariff announcement from the Trump-led administration, concerns about the economic downturn and the IT budget cuts of Doge led by Elon Musk.
These developments have led to delays in large-scale technological transformation projects. Instead, customers are now focusing on cost-saving measures, including supplier consolidation and budget reallocation, which affects new project traffic and revenue visibility for IT companies.
The report predicts a quarter of revenue from large Indian IT companies fell by 0% to 2%. Among the major players, TATA Consulting Services (TCS) may see revenue pressure caused by ramps in transactions with Bharat Sanchar Nigam Ltd (BSNL).
Infosys and HCL technologies may experience revenue declines due to seasonal factors, while Wipro, Tech Mahindra and Sonata software are expected to report weaker results due to company-specific challenges.
Despite revenue pressure, EBIT (revenue before interest and taxes) is expected to be basically stable across the company.
However, profit margins for Infosys and HCL technologies may have a slight impact due to seasonality and wage increases.
Overall, the prospects in the IT sector remain cautious as the company’s efforts are marked by soft demand, tightening customer budgets and global economic uncertainty. (ANI)
