The covid19 Pandemic has accelerated the digital adoption across enterprises. Many organizations nudged by the new norm of WFH are going for transformation of core IT infrastructure. It includes not only cost saving IT interventions but IT strategies which can amplify the productivity of the organizations. This include AI driven decision making process and migration of software applications to cloud to streamline IT operation. It is being perceived by industry expert as once in a decade opportunity that can drive the growth of Indian IT companies going ahead.
The clear impact of the Pandemic can be seen in the size of deals being signed by IT majors which has shown significant increase over average size of deals signed over last 2 years. It gives a strong indication of the growth momentum expected among top tier IT companies.
Though, there is headwind of wage hike for FY22 in coming quarters, it is expected that IT companies should be able to broadly sustain the EBIT margin seen in Q3FY21-Q4FY21 over FY22, led by positive operating leverage and admin and travel expense still in control.
Though, the valuations have jumped for all these IT companies, it is expected that the should be able to sustain these valuation multiples, if deal win momentum remains strong. We expect that Indian IT companies are able to use this opportunity to develop cutting edge solutions that will lead their transformation into top tier IT companies across the Globe.
