IT services growth to return in 2021 defying coronavirus pandemic: Fitch
Oct 06, 2020
HONG KONG: The Indian IT services sector is likely to resume high single-digit revenue growth in 2021-2022 on higher demand for digital transformation, according to a new report by Fitch Ratings released on Tuesday.
The impact of coronavirus pandemic is likely to be only moderate and short term as customers focus on transforming their businesses digitally, moving services and work platforms online, and minimise spending on legacy services, it said.
Most companies have reported robust deal wins that should support growth in 2021-2022 despite the revenue decline in 2020.
"We expect the Indian industry will continue to take advantage of its low-cost operations and maintain its strong foothold in the global IT sector. The industry will continue to remain export-driven as it mainly serves US and Europe-based clients," said the Fitch report.
"We forecast the industry's revenue to rise by a high single-digit percentage during 2021-2022 after a relatively flat year in 2020. The industry has grown at a CAGR of 8 per cent during 2014-2019. We also believe the impact from the US ban on new H1B and L1B visa applications is manageable," it said.