R Chandrasekhar, Nasscom President, believes that the impact of Brexit (Britain’s exit from the European Union) will remain for some time. In an interview to CNBC-TV 18, R Chandrasekhar said that the IT industry is witnessing a “little bit of impact” from Brexit. “The depreciation in pound has also had an impact on the IT companies. “This is a watershed moment for the Indian IT. I believe we are reasonably prepared,” he said. R Chandrasekhar is of the view that the Indian IT sector needs to be proactive in the space of mergers and acquisitions (M&As). R Chandrasekhar also did not rule out a cut in guidance. “The days of 20% plus margin are over,” he said.
Recently, Indian IT majors TCS and Infosys have struck a cautious note on growth prospects on the back of global uncertainty. TCS, which is India’s largest IT services exporter, has given a cautious outlook for the coming quarters, stating that clients are holding back on discretionary spending. TCS has characterised customer outlook “as one marked by abundant caution”. The IT major has said that delay in spending impacts the banking and financial services sector.
Watch: NASSCOM sees Some impact on the IT sector due to Brexit
Recently, Mindtree had said it expects the second quarter revenue to be lower than the previous quarter. Mindtree sees an impact of cross-currency movements, project cancellations and slower ramp-ups in a few large clients across different verticals. Last month, Infosys CEO Vishal Sikka had also said that there are “uncertainties across sectors, geographies”. “We are seeing softness in some clients, post-Brexit, now which was not anticipated at the start of Q2,” Sikka had said. However, Nasscom has said there is no immediate reason to revise forecast of 10-12 per cent revenue growth in IT exports for FY17.