Revenue of IT firms will decrease! – Revenue of it firms will decrease
Industry analysts believe that the US retaliation may affect the growth scenario of Indian IT companies in major American areas such as manufacturing, retail and consumer packaged goods. After banking, financial services and insurance (BFSI) for largecap and midcap companies, these three verticals contribute the most in revenue. But now the decision -making process will be dull due to uncertainty in these areas and will cost less desirement on new -age technologies.
McVeri analyst Ravi Menon said that he expects ‘very low’ to ‘zero’ growth. But construction and retail sector will not decline. Menon said, ‘Its effect is indirect because uncertainty is increasing and manufacturing, especially in the US, can cause issues that will affect IT expenses. Certainly people are worried that America is moving towards recession.
In the revenue of India’s largest IT service company TCS in terms of revenue, consumer business and manufacturing, the consumer business and manufacturing contributed 15.7 percent and 8.7 percent in the third quarter ended December 31 respectively. Construction and retail contributed about 29.3 per cent for Infosys during the same period, while for Wipro, the consumer business contributed around 19 per cent and energy, manufacturing and resources 16.9 per cent. About 20 percent of HCL’s revenue comes from the manufacturing segment. Most IT companies’ shares on BSE shut down and the BSE Information Technology Index also led to a weakness of 3.78 per cent. There was more pressure on the shares of medium companies like KPIT, Koforge and Persistent.
For BFSI and commercial services, the impact of tariffs is likely to be low while it will have a greater impact on the demand for IT services. Although the tariffs do not have a direct impact on the banks, they are at risk of their manufacturing and funding of CPG and retail customers. BNP Pariba said that some of the US economic figures have showed signs of recession, which has increased the risk of recession in inflation and the worst condition. BNP Pariba Securities analyst Kumar Rakesh wrote in a note before the announcement of the tariff, ‘Demand for IT services (especially desirement) is unlikely to remain untouched by this recession. Keeping this in mind, investors have cut hopes of growth significantly and now they feel that the revenue growth in FY 2026 will be weaker compared to FY 25.
Although there is a possibility of designing expenses and impact on small IT contracts, analysts say that such economic challenges will also mean more attention to large cost favorable deals as customers will insist on increasing efficiency.
First Published – April 3, 2025 | 11:47 pm IST
