NEW DELHI: India’s IT services industry is expected to double down on digital businesses in 2021 due to massive demand from enterprises for services in the cloud, cybersecurity, and remote work segments. Although the top players have missed their margins and revenue targets for FY21, the Covid disruption lasted only until the first quarter (April- June 2020) for a majority of IT firms.
Companies such as Infosys and HCL Tech have increased their revenue and margin guidances for the remaining financial year anticipating quicker recovery driven by strong demand for digital services. Experts note that the sector has shown resilience during the pandemic and kept essential services running with deep tech innovation.
With the likelihood of a more relaxed visa regime in the US with the change in administration, analysts have placed their bets on IT majors as well as mid-cap firms for the next year. However, the top tech CEOs have also sounded an alarm over rising cases of new Covid strains in key client geographies such as the US and UK, which may be act as a headwind for revenues.
Notably, both Infosys and Wipro recently announced billion-dollar deal wins last week from Germany—multi-year contracts which will also involve upksilling of thousands of employees. Salil Parekh, CEO, Infosys said that the IT transformation initiated by Covid will continue to drive business, but that caution needs to be exercised because of new strains, he noted.
With over 95 per cent of employees still working from home, top tech CEOs have said that productivity has remained top-notch and that this has led to increased client confidence. The sector has also been one of the few to have announced salary hikes and promotion cycles from October this year.