Software exports race ahead, but listed IT firms fall behind

The Reserve Bank of India's (RBI's) balance of payments (BOP) data and annual disclosures by the country's listed information technology (IT) services companies reveal a widening divergence in software exports.

- KRISHNA KANT

While the RBI figures show robust double-digit growth in India's software services exports, listed IT groups have struggled with low single-digit increases in foreign exchange revenues and net sales.

According to the RBI, India's software exports rose 12.7 per cent year on year to $180.6 billion in FY25. By contrast, the combined forex revenues of 64 listed IT services groups spanning the BSE500, BSE Midcap, and BSE Small Cap indices grew by only 3.8 per cent to $69.6 billion.

This divergence is not new but has only widened in the post-pandemic period. Over the past five years, India's software services exports have expanded at a compound annual growth rate (CAGR) of 14.2 per cent, doubling from $93.1 billion in FY20 to $180.6 billion last financial year. Listed IT companies, by comparison, have managed a CAGR of just 7.1 per cent in forex revenues, rising 40 per cent over the same period from $49.5 per cent to $69.6 per cent.