According to Fitch Ratings, 2021–2022 galvanized growth in the Indian IT services sector is expected to witness high-digit revenue growth due to high demand for digital change after 2020.
In a new report titled ‘Spotlight: Indian IT Services Sector’, Fitch said the impact of the coronavirus epidemic is seen only as medium and short-term, as customers digitally transform their businesses, services and work platforms online And focus on minimizing. Spending on legacy services.
The epidemic will accelerate digital IT spending, it said. The report states that most companies should support growth in 2021–2022, despite a decline in revenue in the second quarter by 2020.
“The Indian IT services sector is likely to resume high-digit revenue growth in 2021-2022 on high demand for digital conversion,” it said.
Fitch said it expects the Indian industry to continue to take advantage of its low-cost operations and maintain its strong edge in the global IT landscape.
“The industry will continue to be export-driven, serving primarily US and Europe-based customers. We expect a high-digit percentage increase in industry revenue during 2021-2022, after a relatively flat year in 2020. Huh.
The industry has seen an average growth rate of around 8 percent during 2014-2019. The impact from the US ban on new H1B and L1B visa applications is “manageable”, it said.
Profitability – as measured by income before interest tax depreciation and amortization or EBITDA margin – is likely to remain stable, Fitch’s report noted, with strong demand for services, Indian rupee depreciation and cost control measures, such as During salary deposit. Bearish, supporting stable profitability.
“Shareholder returns that exceed our expectations are a significant risk to the ratings of Indian IT services companies,” it said.
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