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As pressure mounts on Indian IT services companies in the US market, an unexpected quarter has brought some relief – a prolonged blowout in business from India and Rest of the World (RoW) regions. From TCS to LTTS, including mid-sized IT companies such as Happiest Minds, their revenue in India has grown significantly.
For TCS
Likewise, other regions such as the Middle East, Africa, Latin America and the UK also experienced much slower growth rates of 16%, 13.2% and 8.1% respectively. TCS’s revenue share in India was about 4.9% in the September quarter and grew to 6.1% in the December quarter.
A recent Gartner report said that IT services spending in India is expected to grow by 13.4% by 2024, up from 10.1% in 2023. This is in sharp contrast to global IT services spending, which is expected to grow by 8.7%. 2024. The report added that due to lack of in-house skills, Indian companies are looking to partner with external providers in areas such as artificial intelligence, industrials and others.
For LTTS (L&T Technology Services), revenue from India grew 33.4% year-on-year in the third quarter, followed by Europe and Rest of the World (RoW), which grew 21.1% and 11.7% respectively. During the same period, the North American business grew only 2.1%.The IT engineering services company generates approximately 21% of its revenue from the Indian market
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Happiest Minds’ revenue from India has grown steadily for several consecutive quarters. India is the company’s second largest market. India’s share increased from 15.4% in Q3FY23 to 16.4% in the just-ended quarter.
Joseph Anantharaju, executive vice chairman of Happiest Minds, said: “Our revenue share from India has been increasing every year for the past three or four years. The good thing is that we are not doing it in a compromising way. Our gross margins are probably the same as those in the U.S. Not at the same level, but comparable.”
He added: “We are very bullish on the Indian market because I think the economic environment here is very positive and relative to many other regions or countries, I would say it is much better. The scope of digitalization here is also quite large because many industries are even Companies are not really in the early stages of digitalization yet.”
But he warned that this is a value-focused market and they have to figure out what deals they are going to do in areas where they can have a value proposition that allows them to command a bit of a premium.
Among large enterprises, Tech Mahindra
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