The good, bad and ugly: Decoding the IT pack’s Q4 show
"When sorrows come, they come not single spies, but in battalions." —William Shakespeare, Hamlet The higher the climb, the harrowing the descent. If there is one sector which is experiencing this truism, it is information technology. From the heady days of the pandemic-triggered digital boom, to the current slowdown due to growth headwinds in the West, the country’s $250-billion IT sector has traversed a full cycle over the past few quarters.
Elevated interest rates and weak consumer sentiment in the US and Europe—the bread-and-butter markets for India’s software services exporters—have wreaked havoc on the sector’s performance. Add to that, generative artificial intelligence (GenAI) is precipitating an epochal shift in the industry and beyond, further queering the pitch for firms more reliant on legacy processes and models. Investors, meanwhile, are divided on whether to take a contrarian bet on the embattled sector or wait for the storm to pass.
IT firms’ March-quarter numbers provide the perfect opportunity for stakeholders to assess not only their current predicament but also gauge the managements’ expectations for the immediate future. Here’s the good, bad and ugly of the IT sector’s fourth quarter (Q4) performance so far. Deal wins: One of the most heartening trends of the Q4 results was that despite uncertain macroeconomic conditions, companies’ deal wins remained robust.
India’s largest IT services company, Tata Consultancy Services (TCS), logged its highest-ever deal wins at $13.2 billion (up 32% year-on-year), while that of Infosys stood at a healthy $4.5 billion—the only silver lining in an otherwise dismal set of numbers. More importantly, the key deal wins came across industry verticals and geographies. “IT
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