Currency tailwinds may help IT companies shake off seasonal December blues
December-quarter performance will show improvements on currency tailwinds, but caution will unlikely cease its vigil, as India’s $254-billion technology outsourcing industry grinds its way out of a relatively protracted stagnation that was caused by circumspect budgeting in its primary revenue generating markets.
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Analysts tracking the industry said management commentary by the companies that lead global services outsourcing will be key, pointing to how 2025 will pan out for the industry.
“Q3 is a seasonally weak quarter. This time the performance will be better because of rupee depreciation,” said Pareekh Jain, founder of consultancy firm EIIR Trend. “Overall, we will look forward to management affirmation that the market bottomed out in CY24 (calendar year 2024) and CY25 should be better.”
The industry will see the third largest IT player HCLTech likely fronting the organic revenue growth among top-tier software service exporters due to its strong seasonality in software business and Coforge to lead the mid-tier peers due to higher large deal ramp-ups.
As per an Emkay report, “Recovery in BFSI (banking, financial services & insurance) will aid growth, while weakness in manufacturing, particularly auto, is likely to weigh on growth.”
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