For IT cos, growth in Europe may only be temporary relief

Full-scale revival needs US rebound: Analysts

- AVIK DAS

With demand for information-technology (IT) services in North America still sluggish, Europe has become a source of optimism for Indian companies because it is delivering steady gains over the past two years and continuing to outperform in the latest quarter.

Yet analysts caution a full-scale revival will require a rebound in the United States (US), particularly in manufacturing, retail, and BFSI (banking, financial services, and insurance), because Europe contributes only about a third of the revenues.

Companies like Infosys and Tata Consultancy Services are benefiting from large outsourcing deals, rising research & development (R&D), and increasing cloud and AI (artificial intelligence) adoption by European enterprises. For example, Infosys' growth in Europe over the past three years has far surpassed that in North America and the company's overall growth.