IN A WORLD turned upside down by the Covid-19 pandemic, IT industry lobby group Nasscom’s optimism stands out. “We are a $178 billion industry (excluding the hardware segment) which has the potential to touch $300-350 billion over the next year. Almost 70-80% of that will be driven by digital,” says Sangeeta Gupta, Senior Vice President at Nasscom. The reason is simple. The pandemic upended everything and forced companies to turn to digital offerings on the cloud to re-orient their work flow as established ways of conducting business were disrupted. Almost overnight, they adopted business practices that would have been rolled out gradually over the next few years.
While going digital was initially about supporting daily operations, over time, it has become central to overall business strategies. The global cloud market, for instance, is expected to grow to $832 billion by 2025. Companies across sectors are adopting artificial intelligence (AI), machine learning (ML), robotics and cloud computing to become more efficient and improve customer experience.
The big gainers of the trend have been leading Indian IT services firms. “Fence-sitters on digital transformation seem to have reached the tipping point, shoring up demand for services. Five years of digital acceleration has been compressed during the pandemic,” says Thierry Delaporte, CEO and Managing Director, Wipro. A study by industry body Nasscom earlier this year said organisations plan to increase digital investments by 30% in the next 18 months.
The rise in demand for services took combined revenues of India’s top five IT majors — TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra — to ₹4,39,826 crore in FY2021, 6% higher than in FY2020.
The momentum has continued in the first half of FY2022. In H1 of FY2022, the five companies reported revenues of ₹2,49,497.7 crore, 18% more than the same period of FY2021. TCS led with ₹92,278 crore (17.6% growth), followed by Infosys at ₹57,498 crore (19.2%). Wipro reported revenues of ₹37,920 crore while HCL Tech grew 11.8% to ₹40,723 crore. Tech Mahindra revenues grew 14% to ₹21,078.9 crore.
This growth is driven by the urgency with which businesses are transforming digitally. In FY2021, the Indian IT industry’s digital revenue was $50-53 billion, accounting for 28-30% of the total. The growth was nearly 10% year-on-year, says the Nasscom report. Prior to this, growth has been in single digits only. “With Covid, digital acceleration has grown multi-fold. Today, every company has no choice but to have a digital front-end and back-end,” says Sangeeta Gupta of Nasscom. She believes adoption of digital by enterprises will widen opportunities for the IT industry, boosting their growth prospects.
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