Indian IT firms to record robust growth in Q2 of FY21

Indian IT firms to record robust growth in Q2 of FY21

Despite the COVID-19 pandemic and subsequent economic downturn, IT industry is set to witness robust growth.

Analysts suggest that the Indian IT sector will see a boom in the September quarter.

Although the IT industry is going through a big change amid COVID-19 pandemic, it is set to witness robust Q2 results.

It is believed that the industry will go through steady demand, negligible supply-side impact followed by stable margins and improved near-term growth.

The Nifty IT index in July-September quarter has delivered a whopping 2,600 bps performance.

It has outperformed the benchmark Nifty due to improving near term fundamentals. The IT firms have reported the worst revenue and earnings in Q1 of FY21 but it is set to improve.

American IT firms with a strong workforce and hold in India, Accenture has issued significant growth guidance ahead of HCL’s mid-quarter upward revision.

Even the positive commentary of Infosys, TCS, and other IT service players points towards a stronger demand environment.

Indian IT industry has seen accelerated growth in areas such as core modernisation, digital transformation, cloud migration and automation. The growth is stronger than what was anticipated amid Covid-19.

Top market analysts predict that the IT companies are likely to report sequential revenue growth of 1.8-3.7% in cross-currency terms.

The growth in revenue will be led by demand across large verticals such as telecom, financial services and insurance.

Infosys is likely to report 2.6% sequential growth in CC terms. Wipro’s revenue will record 2% growth while HCL Tech may post 3.7% growth in CC terms.

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