
IT Services Recover as BFSI Demand Strengthens and Uncertainties Ease
CIOTechOutlook Team | Thursday, 02 January 2025, 02:44 IST
IT services firms are anticipated to experience a steady rebound in the October-December period, propelled by heightened demand in the banking, financial services, and insurance (BFSI) industry, along with a decline in project terminations, reduced furlough durations, and diminishing macroeconomic uncertainties. Although growth is anticipated to stay modest on a sequential level, analysts indicate that the forecast for specific companies and total contract value (TCV) is significantly improved compared to last year.
The main factors fueling recovery are rising digital investments in financial services, ongoing embrace of cloud and data services, and the clarification of uncertainties related to elections in developed markets. As per Kotak Institutional Equities, "Furloughs in the December quarter are much reduced compared to last year, bolstering growth momentum."
Mid-tier companies like Coforge and Persistent Systems are set to drive the growth path with sequential revenue gains of 4.7%, while HCLTech is anticipated to achieve a robust 4.4% increase. Nevertheless, major players in the industry such as TCS and Infosys are expected to announce significantly slower growth, with rates falling beneath 1%.
LTIMindtree is anticipated to demonstrate steady growth, supported by its varied portfolio, despite facing difficulties in the hi-tech sector. Analysts highlight the strong performance of the BFSI sector as a positive aspect, but they warn that other sectors are still uncertain.
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