The Information Technology (IT) sector seems to have made a comeback in India. After a couple of years of lacklustre growth, finally, hiring and revenue seem to be having an uptick. Stable macro-economic growth in both the US and Europe has made more companies across industries spend more on outsourcing technology work, resulting in higher demand for services offered by IT outsourcing companies. The two biggest IT companies i.e. Tata Consultancy Services (TCS) and Infosys have estimated healthy revenue growth in constant currency terms at 11% and 9% respectively by 31st March. Barely 2 years ago, aggregate revenue growth of the top 5 companies had dropped to single digits and by the first quarter of F.Y. 2017-18 had bottomed out at 5%. The quarter gone by had an entirely different story to narrate. Total revenue of India’s 5 largest listed IT companies (TCS, Infosys, Wipro, HCL and Tech Mahindra) together saw their aggregate revenue in ₹ terms rise 18.8% year on year in the three months ended December. One would have to look back 4 to 5 years for a growth of this level.
The revenue stream has seen an uptick as deal momentum continued for software service providers in the third quarter and has been the most bullish in a decade led by robust growth in digital services and recovery in legacy deals, suggesting a return in client confidence. On the hiring front too, there is good news. The top 5 IT firms mentioned earlier added 99,010 employees last year to take their workforce to about 1.23 million as against an addition of 19,360 employees in 2017. However, some skepticism suggests that much of the jobs added in 2018 may have been because of increased hiring in the US under pressure from Donald Trump administration and customers outsourcing large contracts on the condition that vendors absorb some of their employees. However, going forward, automation may play a big part and not as many employees may be seen to be added to the workforce.