IT Industry Situation Amidst Coronavirus Attack
Published by : Industrial Automation
Indian IT companies witnessed a significant slowdown in the fiscal year growth rate owing to the disbalance created by the COVID-19 virus pandemic situation.
“It is expected a decline of 2-7% in the growth of IT firms in India” – HDFC Securities, while Accenture stated “there will be a drop of 3-8% in the revenue growth rate of Indian IT companies”
“Indian leading tech companies TCS, Infosys and HCL expected to hit a reduced technology spending by clients from the US and Europe”
In India, it is estimated from various analysts of security firms that in the fiscal year 2020, the IT firms could face delay in pipeline conversion and pricing impact on core business. As per the delay in pipeline conversion and pricing impact on core business, the revenue from the exports of India’s software and services grew at 8.1 to reach USD 147 billion in FY2020.
According to ICICI Direct, it is predicted that the IT companies are expected to witness a pricing pressure, revenue loss, client bankruptcy, and slower client decision making led by lower discretionary spending in the coming years across the Indian and global markets.
Travel Restrictions Delaying Project Execution
Companies such as Infosys, Wipro, and HCL Technologies are revealed their annual revenue reports along with the annual revenue forecasts for the coming year, while Wipro also reveals the revenue guidance for the first few quarters.
In the current situation, the IT companies are delaying the execution of existing projects along with ramp-up projects and close deals owing to witness a delaying allocation of funds for new and already running projects. Also, there is a possibility that arises for pricing pressure to minimize the additional cost to sign low-priced deals and renewal project prices.
Considering the facts from the company’s press release and reports that they are wide witnessing cancellations of projects by clients owing to global lockdown situation and reduction in providing on-site support to the client.
Industries such as manufacturing, hospitality, airlines, retail, hi-tech, oil & gas, and financial services companies are estimated to be most affected during the pandemic situation due to the spread of the COVID-19 virus.