Indian tech giants brace for growth slowdown
BENGALURU, INDIA — India’s IT giants are preparing for a significant slowdown in growth as their largest market, the United States, curtails technology spending.
The country’s second-and third-largest IT companies, Infosys and HCL, have recently stated that they expect their revenue growth to fall to between four and eight per cent in FY2024 compared to double digits in the previous 12 months.
Similarly, India’s largest IT company Tata Consultancy Services (TCS) expressed to analysts that clients are reducing spending on “discretionary” and “noncore projects.”
During the most recent quarter, North America accounted for 52.4% of revenue at TCS, 61% at Infosys, and 63% at HCL.
The slowdown comes after a surge in demand from companies accelerating plans to digitize their operations during the COVID-19 pandemic.
“The slowdown was sharper than expected,” said Kotak Institutional Equities analysts Kawaljeet Saluja, Sathishkumar S, and Vamshi Krishna.
The analysts added that the banking crisis in the United States regional and European banks in March 2023 induced greater caution and could impact the June 2023 quarter.
