Nasscom on Wednesday lowered IT export growth outlook to 8-10 per cent for 2016-17 against earlier projection of 10-12 per cent. Nasscom President R Chandrasekhar told ET Now, “We don’t expect to revisit IT revenue guidance again this year.” He also said that transient risks to IT sector are slowdown in BFSI segment in US, Brexit and US election outcome. Earlier this year, Nasscom said that margins of Indian IT companies are under pressure due to reasons like global economic turbulence, while there may be a marginal decline in hiring because of increased automation and efficiency.
“Companies are quite upbeat about the revenues and prospects, notwithstanding headwinds in different places for different reasons. But clearly, there has been a lot of pressure on margins. That is much more visible and much more tangible than the overall revenue trajectory,” R Chandrasekhar had said. He said the IT companies which have contracts in pound sterling may see some pressure on the margins due to the decline of the pound after UK voted to exit the European Union. He added that there may be a slight decline in hiring by IT companies due to increased automation and efficiency levels.
According to him, the IT and ITES industry provided three million jobs when it reached $100 billion in size and it is estimated that it would require about 1.5 million people for the second $100 billion.
Meanwhile, even as the IT biggies suffer, there is expected to be some boom in the technology startups space. The number of technology startups in India is expected to more than double and cross 10,000 by year 2020, though there has been a drop in funding in the current year, according to a report released at the Nasscom Product Conclave last month. The Nasscom-Zinnov report ‘Indian Start-up Ecosystem Maturing – 2016’ says, the number of tech start-ups in India is expected to grow by 10-12% to over 4,750 by the end of 2016 as compared to 2015.