Indian IT takes Moonlighting Seriously, Recession Even More Cautiously

Indian IT takes Moonlighting Seriously, Recession Even More Cautiously

Indian IT has a much bigger problem to tackle than?moonlighting . With inflation pressure, geopolitical turmoil, the energy crisis, and rising interest rates, businesses worldwide are gearing up to face the wrath of a global recession.?

Last week, JPMorgan chief?Jamie Dimon? said that the US and the global economy could tip into a recession mid-next year. He said that runway inflation, big interest rate hikes, the Russian-Ukraine war, and other indicators of a potential recession.?

“These are very serious things, which I think are likely to push the US and the world. I mean, Europe is already in recession, and they are likely to put the US in some recession six to nine months from now,” said Dimon.?

What does this mean for Indian IT??Nearly?40-78 per cent? of the revenue of Indian IT companies comes from the US. TCS, Infosys, Wipro, HCL Technologies, and Tech Mahindra have more than 50 per cent exposure. The IT companies in India account for?55 per cent? of the global IT services market.?

So far, no impact:?Despite the uncertainties and analysts warning of business momentum slowing down, most Indian IT companies have managed to maintain double-digit growth and are continuing to expand their presence in Europe, the UK and North America.?

Read:?This Time It’s Different for Indian IT?

TCS

“Despite growing newsflow around a possible economic slowdown across the world to client concerns over how that might affect their businesses, we haven’t seen any changes in their spending on us so far,” shared?TCS? chief?Rajesh Gopinathan .??

In FY23 Q2,?TCS? witnessed 19.1 per cent growth from North America, the UK saw 12.6 per cent, and Continental Europe grew 12.1 per cent. “Individual customer conversations' opportunities exist, but caution also exists,” said Gopinathan.?

He said that people are talking about caution and need to remain vigilant to see whether that will translate into a budgeting planning cycle for next year and what that implies for overall demand. “But, we will have to play it by the year as it comes,” he added.?

Infosys

In FY23 Q2,?Infosys? also saw double-digit growth, specifically from North America, which grew by 15.6 per cent and Europe by 28.5 per cent. The company is optimistic that it is well prepared for the evolving macroenvironment. “The conversations with clients we have seen this quarter, our digital business has grown over 30 per cent, and our cost services have also grown,” said Infosys chief Salil Parekh.

Wipro

Wipro also recorded double-digit growth across America and Europe, which stood at 15 per cent and 12 per cent, respectively. Before announcing the FY23 Q2 results, Wipro chief?Thierry Delaporte? noted that the macroeconomic conditions across all markets and sectors have changed. He said that they have been speaking to their clients every day and are seeing a change in their level of optimism.?

Commenting on the demand environment in the US and Europe, Delaporte said when there is a recession, it is steeper in the US, and in Europe, it comes a little later and takes time to bounce back.?

HCL Technologies

HCL Technologies chief?C Vijayakumar? said they aspire to touch between $2 billion to $2.5 billion every quarter. “If I were to do a comparative: North American pipeline, deal momentum, the conviction of conversion, and timeline is more than Europe,” he added, confidently saying that the US will lead the growth momentum, compared to Europe, in the coming quarters.?

Mindtree

Mindtree claimed that it witnessed 72.8 per cent growth from North America, followed by continental Europe, the UK, and Ireland, contributing 19.6 per cent, and APAC and the Middle East contributing 7.6 per cent of its revenue growth in the second quarter of FY23.?

Despite the uncertainties in the market, the company looks to double down its investment in Europe. “We have been investing in Europe for the last 12 months. And that is manifested in terms of some of the growth coming in Europe, and they happen to be in the manufacturing and the retail segment,” shared Mindtree chief?Debashis Chatterjee .?

Read:?Indian IT loves a Good Recession


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And I think Inflation and Recession have a lot to do with the Stimulous Checks and Student Loan Forgiveness, ss well ad the Unemployment Rate.

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