Indian IT services industry projected to see 3-5% revenue growth in FY25: ICRA

New Delhi, March 18 (IANS) – The Indian IT services industry is expected to see a mild improvement in revenue growth, from 2 per cent in the current fiscal year to a modest 3-5 per cent in FY2025, according to a new report. Despite this, credit rating agency ICRA maintains a stable outlook on the industry.

ICRA noted that the banking, financial services, and insurance (BFSI) and telecom segments have contracted more than others, but critical spending and cost optimization deals are supporting growth prospects. The agency expects a pick-up in growth momentum once macroeconomic headwinds subside.

Hiring is expected to remain muted in the near term, gradually picking up as growth momentum improves. Attrition levels are also expected to stabilize, nearing the long-term average of 12-13 per cent, as demand-supply mismatches from previous hiring levels normalize.

The Indian IT services industry maintains a net cash surplus position, with strong liquidity due to high operating cash flows and modest capex and working capital requirements, according to ICRA. The industry is expected to continue to benefit from stable cash flows and strong balance sheets of industry players.

In conclusion, the Indian IT services industry is poised for modest revenue growth in the coming years, with expectations of improved hiring and stability in attrition levels. Despite challenges in certain segments, the industry continues to demonstrate resilience and strong fundamentals.