Drawing The Net Closer

- Arindam Mukherjee

USED to consistently high growth numbers in recent years, the last few months have been rather challenging for the Indian IT sector. The $155 billion IT services industry in the country is in a flux as head winds continue to hit Indian IT companies. Clients have not been as magnanimous about spending; a few developments have pummeled numbers too. With the Donald Trump presidency in the US, the sagging futures of the IT sector are expected to plunge further in the coming quarters.

Reflecting the bleak prospects and following a number of companies reporting low revenue growth, industry representative body Nasscom scaled down the industry’s growth figures for fiscal 2017 from 10-12 per cent to 8-10 per cent in November. Earlier this week, Nasscom did something it has not done in over two decades. It deferred a growth guidance for the financial year 2017-18 till the next quarter, hoping for some miracle.

According to Nasscom, the deferment was due to prevailing uncertainties. It is also because between November, when it revised its estimates, and now, nothing has changed—prospects are as bad as it were three months ago. The future, to reiterate, also looks dim.

“The short-term outlook remains uncertain because of global macro economic instability and political volatility. Cross-currency fluctuations and structural shifts also contribute to the uncertainty,” Nasscom said in a statement. It said that it will issue a guidance for the sector after a quarter, once it has interacted with all stakeholders and gets a clearer picture of the ground situation.

Although uncertain, Nasscom is likely to announce its guidance sometime in May after firms finalise their fourth quarter earnings and come out with their annual results, which would provide a clearer trend.