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HomeTechIndian IT companies ready to face headwinds: report

Indian IT companies ready to face headwinds: report


Despite global macroeconomic headwinds, brokerages and analysts remain bullish about the Indian IT sector’s market opportunities in the event of a downturn, said a report by credit rating agency S&P Global Ratings.


This, however, does not mean that their growth over the next 18 months is immune to global shocks. Market researchers expect the Indian companies to ride over difficult times backed by strong balance sheets and execution prowess.

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Rated India IT companies have strong financial profiles. They are in a net cash position and continue to generate solid free operating cash flow.

This provides financial headroom for acquisitions and share distributions.

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Subcontracting costs and wage inflation are declining because attrition rates have stabilised since the first quarter of 2023.

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IT companies have also invested in training by allowing a high entry-level graduate intake in the past few quarters.

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This will widen the talent pool and lower employee costs per revenue for the next two years, given the lower costs of graduates.

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