BENGALURU: Indian Information Technology is expected to have lower growth rate of 11-13 per cent for Financial Year 2016. This growth rate is lower than the forecast for FY15 of Nasscom, apex business association, says a study.
Business Standard reports that Offshore Insights, research and advisory firm predicts that the sector will grow at 11.5 per cent for FY15, lower than Nasscom’s 13-15 per cent.
Survey based on 400 companies representing places in North America and Europe, also stated the North American market will continue to recover and clock about five per cent increase in overall IT spending. The UK and Nordic parts will witness similar growth. However other parts of Europe and Japan will see flattish budgets, with a few companies even shrinking their IT spending.
On the whole IT services spending will see moderate growth. Alongside, the sources to buy these services will diversify, as new-age providers of software as a service and platform-based services get higher adoption than in the past two years.
Sudin Apte, research director, Offshore Insights says that “While client demand drives are valid, it’s not fully converting into a substantial budget increase. Our interactions show many clients are still conservative. Further, as Europe continues to face economic challenges and oil producing countries face a crunch, we don’t expect global IT spend and offshore spend to increase significantly and growth levels will remain the same as last fiscal.”
According to the survey the overall IT spending has been increasing on a slower pace. It was 2.5 per cent in 2013 and 3.5 per cent in 2014. The 2015 number at four per cent, though an improvement, is slow.
Interestingly, more than half of country’s total IT exports are from top five entities in the IT services.
“The top Indian players have increased their revenue share but the mid-cap players are getting squeezed, with their share in the overall revenue coming down to 18 per cent from the earlier 21 per cent,” added Apte.
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