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Indian IT Companies – Announcement of the 4QFY22 (March-22) results sets expectations of continued revenue growth led by resilient demand
Indian IT Companies – Announcement of the 4QFY22 (March-22) results sets expectations of continued revenue growth led by resilient demand

April 7, 2022

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With the start of April we are all awaiting the final set of quarterly financial results from the Indian IT companies, with an expectation of continued growth during 4QFY22 (see details of the last quarter here).

Lets look at the top 10 messages that we expect from the Indian IT companies as they start reporting the quarter’s results this month:

  1. Robust deal pipeline:  The deal momentum witnessed during the last quarter is expected to continue, indicative of strong order bookings for 4QFY22 with the domination of small-mid size deals expected to continue. This expectation of growth momentum is further supported by the deal numbers for the year 2021 recently released by ISG. At a record high ACV of $33 billion of managed services, the global IT services industry emerged from the pandemic stronger than ever.

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  1. Digital will continue to drive the strong demand sentiment: Cloud, and core transformation will continue to be the key driving themes.
  1. Growth in revenues: Most companies are expected to report sequential growth in revenues between 3%-4%, driven by resilient demand with no impact of either the ongoing geopolitical crisis or of the resultant hyper-inflationary environment on IT spending decision-making.
  1. Digital Revenues: Digital revenues are expected to witness an uptrend, with an increased share in total revenues.
  1. Growth momentum across major geographies: Both North America and Europe are expected to maintain a healthy growth trajectory.
  1. Broad based growth across all segments: BFSI, Telecom and Manufacturing are expected to lead in terms of growth; with all major segments expected to maintain growth this quarter as well.
  1. Margins are expected to remain under pressure: Supply-side challenges will remain a key concern creating pressures on the margins which are expected to remain flat/decline slightly compared to last quarter.
  1. Hiring to remain strong: To ease supply pressures companies will continue to hire, as attrition is expected to remain high. Overall, the next year is also expected to see an increased focus on hiring and re-skilling as the demand for new age digital skills continues to increase.
  1. FY23 Guidance will be key message: We expect companies to share a positive outlook for FY23, with the double-digit growth expectations to continue in the next year well, as the optimism continues on the demand side
  1. Double-digit growth expectations for FY22 will be fulfilled:  Overall, we expect companies to report the double-digit growth for FY22, which has been the key driving theme for the year. 

With these expectations we look forward to analysing the actuals reported by the Indian IT companies in the coming months and present our consolidated view on the industry.

Read more details on how the operating metrics shifted across the Indian IT companies in 3QFY22 in our latest Quarterly Industry Review. Stay tuned for more updates on Industry Performance at NASSCOM Community. Happy Reading!!

Source: Company News and Analyst Reports

 


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Neha Jain
Senior Analyst

Neha Jain

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