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IT services firms may revise guidance upwards in next few quarters: report

Indian IT companies expect native cloud applications to continue to be a major growth driver over the long term, Motilal Oswal said in its latest strategy report.  (Bloomberg)Premium
Indian IT companies expect native cloud applications to continue to be a major growth driver over the long term, Motilal Oswal said in its latest strategy report.  (Bloomberg)

  • Indian IT services companies are expected to revise their guidance upwards over the next few quarters as they gain further visibility, Motilal Oswal said in its latest strategy report

BENGALURU: Several Indian IT services companies are expected to revise their guidance upwards over the next few quarters as they gain further visibility, Motilal Oswal said in its latest strategy report.

“Growth and deal traction continue to point towards an upside in performance versus the guidance. We remain confident of IT services companies growing in mid-teens in FY22," the report said.

Many Indian IT services companies like Infosys, Tech Mahindra, and Coforge revised their FY22 revenue growth guidance upwards from the commentary shared in the previous quarter but remain conservative.

Industry focus continues to be on digital and cloud migration. “Companies continue to see acceleration in Cloud migration work. Managements expect the same to continue over the next 3-5 years. Cloud migration, cyber security, and internet of things (IoT) are frequently coming up in client discussions. Indian IT companies expect native cloud applications to continue to be a major growth driver over the long term," the report said.

IT companies made record net addition of employees in the first quarter ended June which indicates expectations of continued momentum in deal wins and a robust demand environment, Motilal Oswal said.

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