11% recovery forecast for IT sector likely

Mumbai: The Indian IT industry will stage a strong recovery in 2021-22 with a revenue growth of up to 11 per cent, ratings agency Crisil said on Wednesday.

The recovery will be led by increasing outsourcing and accelerating digital transformation services mainly in sectors such as banking, financial services and insurance (BFSI), healthcare, retail and manufacturing, it said.

As per Nasscom, the IT services industry grew 2.7 per cent to $99 billion in 2020-21. The wider industry including e-commerce, business process management and global back offices had grown 2.3 per cent to $194 billion in last fiscal year, as per the industry lobby.

Industry stalwart Azim Premji, the founder chairman of Wipro, also expected a double-digit growth on Tuesday.

Crisil said higher business levels, and more profitable digital deals (45 per cent share in revenues in FY21 versus 40 per cent in FY20) will also help IT services players maintain healthy operating margins.

"With customers focussing on optimising costs, outsourcing of IT services is seeing a steady rise globally.

The pandemic has opened up additional opportunities in digital services due to surge in remote working, e-commerce and automated services," Crisil's senior director Anuj Sethi said.