India's tech earnings raise prospects for key sector

Demand for AI solutions, higher regulatory tech spending drive forecasts for IT services

After more than a year of slowing sales, India's software services companies that power corporations, ranging from global banks to retailers and plane-makers, may finally be seeing light at the end of the tunnel.

Banks spending more on technology to meet regulatory mandates; companies upgrading systems, applications and products, or

SAP, systems; and a broader increase in technology spending after US elections due in November are some of the factors that have raised demand recovery prospects for India's over US$245 billion (S$333 billion) information technology (IT) services sector in 2025, according to BofA Securities.

Tata Consultancy Services (TCS), Asia's biggest IT services exporter, reported its fourth-quarter earnings on April 12, to be followed by smaller rivals Infosys and Wipro in the week after and HCL Technologies on April 26. Sales have been slowing at these firms as their clients in the US and Europe have been reluctant to spend on large discretionary projects at a time of economic uncertainty, and the January to March quarter is also likely to have remained soft.