IT growth trails global clients amid shifting tech spending

Automation, product spends, in-house tech centre investments contributed to decoupling

- Jas Bardia

Traditionally, growth at large cos was a proxy for prospects of IT firms. ISTOCKPHOTO

(ISTOCKPHOTO)

Revenue growth at the country’s five largest information technology (IT) services companies has been slower than that of their global clients since 2023, a divergence that signals a shift in tech spending patterns of the world’s largest companies and leads experts to extend their cautious outlook on India’s $283 billion IT sector.

The divergence in revenue growth also signals that the slowdown in the IT sector is not entirely because clients are holding back their usual IT spending.

‘The five largest IT services companies account for 28% of the country's overall tech sector and the slowdown in their revenue growth might have a cascading effect on their smaller rival companies.