Moody’s Reports Indian It Services Revenue will grow 11-13%
Workers in best managed services Edmonton would likely be interested to know that the IT services sector in India will likely level out at 11-13% per year. This would end the slow-down that’s happened during the last 1.5 years, based on worldwide credit rating agency Moody. The agency made the announcement last Wednesday.
The company stated that the fiscal stability in various developed countries will make up 90% of the software exports of India. This will boost the growth for worldwide IT services industry for outsourcing. The agency stated that in particular this will benefit Indian IT companies.
The study focus on IT services in India. It reports that the country is experiencing gains in market share even though there are many challenges that the country’s IT sector is facing. The agency believes the industry will keep its market share. The operating marching will stay at around 21-22%.
Moody stated that currencies being unstable could pressure the growth estimate. Moody stated that the country’s export revenue was greatly based on US dollars as well as the Euro. Thus, the cost base will stay the same due to the impact of conversion of currencies.
Moody noted that the Indian rupee has dropped in value vs. the US dollar since April of 2011. However, the US dollar is increasing in value against other currencies. This results in a volatile situation and effect of conversion on the agency’s estimates for growth.
The Moody report cautions about the growing IT industry going against worldwide competition and low-cost hubs adding pressure on the total revenues. It claimed this resulted in in higher outsourcing. Thus, multi-nationals had boosted competitive costs by improving their presence in low-cost nations including India as well as the Philippines.
Moody pointed out that as a result of higher competition from various multi-nationals, IT companies in India are moving in the direction of low-cost destinations within India and outside it. They are also offering added services with high value. All of this information was included in the Moody report.
In addition, the report also gave a warning to the industry that various geo-political factors such as limits on outsourcing could also affect its performance. Moody noted that Indian companies would have positive attitudes about new tech. The Moody report stated that growth of digital tech as well as computer services for clouds would cancel out later declines in various traditional services through purchases and also developments within the country.
Moody noted that shifts towards various technologies will have a positive effect on big IT companies. The shift includes techs such as AI, cloud computing, and digital services. Moody believes they will give India an edge over other countries through making important investments in the development of skills.
Cost pressures could result in a consolidation in terms of long-term effects. However, there won’t be any pressure on the IT companies’ credit profiles during the next 12 to 18 months.
This report from Moody is certainly a key one in revealing how India’s IT services will affect the country during the next 1-2 years.