BENGALURU: The IT sector is trudging in the slow lane, operating at a lacklustre pace. Industry analysts forecast a slower pace of recovery with moderate growth for a longer period, even as the IT sector faces potential challenges stemming from the macro-economic environment and technology transition, increasing risks to revenue growth. This presents a case for a weak multiplier effect, leading to subdued growth for Indian IT firms.
Analysts have also observed that growth rates are becoming polarised among various players, primarily influenced by company-specific developments.
“Change in tech cycle is likely to create a transition phase for tech services companies (like 2016/17), causing growth to moderate in short term. We are lowering our dollar revenue growth forecasts by 100-200 bps and expect growth of 4.5% in FY26 and 6% in FY27 for large-cap IT companies,” analysts at Morgan Stanley wrote in a recent report.
