Nasscom Sees IT Sector Revenue Growth At 7.7% In FY20
The Indian IT and Business Process Management sector's revenue is estimated to grow at 8.4 percent in FY20 on a constant currency basis to $192 billion, and the industry continues to remain "cautiously optimistic" about the future, industry body Nasscom said on Wednesday.
On a reported number basis, the growth inclusive of other factors like currency depreciation has inched up to 7.7 percent in FY20 from the 7 percent growth in FY19, the National Association of Software and Services Companies said.
Nasscom, which discontinued its practice of giving a number on the outlook last year, said the growth in FY20 came on the back of a 23 percent increase in the new-age digital revenues and added that the industry was able to add 2.05 lakh jobs on a net basis.
The IT sector is one of the biggest contributors of export revenues on the services front for the Indian economy, and also a major job creator which has fuelled the Indian middle class over the last two decades on the back of a steady supply of engineering graduates.
Nasscom's Chairman Keshav Murugesh told reporters that the industry growth has gone to 7.7 percent on a reported revenue basis from the 7 percent growth in the year ago period despite headwinds like Brexit and protectionist tendencies in major economies of the world.
However, on the outlook front, he said the industry continues to be "cautiously optimistic" and added that it will work on re-skilling of the 4.36 million talent base going forward.
Second largest software exporter Infosys' Chief Operating Officer Pravin Rao said there is no clarity yet on the exact impact of the coronavirus outbreak in China, but added that there can be an indirect impact on the industry as its clients get impacted because of the outbreak in China, which is an important part of the global supply chain.
A survey of 100 chief executives of enterprises across sizes done by Nasscom revealed that 53 percent of them expecting a similar to stronger world economy in 2020, while 60 percent of them feel spends will grow in developed markets.
The IT services sector contributed the highest share of revenues at $97 billion, reporting a growth of 6.7 percent, followed by e-commerce sector which grew 25 percent to $54 billion, it said.
The BPM industry revenues grew 8.2 percent to $38 billion and domestic revenues grew 6.5 percent to $44 billion. The sector generated total exports of $147 billion, which were up 8.1 percent on a reported number basis, the annual data said.
At present, Indian IT companies are investing up to 1.5 percent of their overall $191 billion as skilling is the key objective, the data said, adding that over 8 lakh employees were trained in digital skill sets in FY20.
India is home to over 9,000 startups, of which 27 have achieved the 'unicorn' status by commanding a valuation of over $1 billion, it said, adding that the new enterprises got over $4 billion in funding in FY20. The CEOs' survey also said that 73 percent of the company heads expect another strong year of hiring in FY21 on the back of a rise in revenues.