Nasscom Won’t Provide FY20 Guidance, Releases CEO Survey Instead
Nasscom broke with tradition by not providing its guidance for the industry’s growth for the ongoing financial year.
Instead, the information technology trade body released findings of a survey of 100 IT sector chief executives, which showed that the industry was divided about the prospects for 2019.
Nasscom's guidance was based on history, and that is not the "right thing to do for the industry anymore because the past is very different from the future," said Nasscom President Debjani Ghosh, on the sidelines of a three-day annual summit in Mumbai.
I think we have to create a new lens when we are looking at the future, and the best we can do is understand the sentiments from the CEOs.Debjani Ghosh, President, Nasscom
Nasscom will not release its guidance even later, said Rishad Premji, the chairman of the industry body. The survey presents a "perspective in its naked form, and you can interpret from that, what you would like," he added.
The survey showed that global economic uncertainties were leading to "a cautionary outlook" among industry leaders, even as they expect digitization initiatives to continue with the same momentum in 2019.
“I am not backing away from saying that we are optimistic, but we are cautiously optimistic about the future,” said Ghosh.
Here are the highlights from the first edition of Nasscom's CEO survey:
- While 51 percent of the CEOs felt that the year ahead would be similar or somewhat lower than 2018 for IT-business process management industry, 49 percent thought that it would be better.
- Half of the CEOs surveyed believe that the global economic and business outlook will be lower than 2018, while 50 percent think it will be similar or better.
- 53 percent expect similar tech and BPM spending, while 34 percent expect somewhat better spending than 2018. The remaining 13 percent expect spending to be somewhat lower.
- Advanced analytics and artificial intelligence were the top priorities for more than half of the CEOs surveyed.
- Hybrid cloud and cybersecurity are upcoming technology priorities.
- 1,70,000 new jobs were created in 2018. 90 percent of CEOs surveyed expect tech hiring to be similar in 2019.
The FY19 Track Record
The IT industry's revenue for the year-ending March 2019 is expected to grow marginally above the Nasscom's guidance of 7-9 percent in constant-currency terms. Software exports are projected to grow 9.2 percent, while the domestic business is expected to grow 7.9 percent, according to the industry body.
Fastest Growth
After nearly two years of single-digit revenue growth, the country’s top five listed IT firms, in October-December 2018, grew at their fastest pace in 18 quarters on the back of strong order books and deal wins.
Tata Consultancy Services Ltd., Infosys Ltd., Wipro Ltd., HCL Technologies Ltd. and Tech Mahindra Ltd. together saw their aggregate revenue in rupee terms rise 18.8 percent year-on-year for the three months ended December, according to exchange filings. The last time the companies witnessed high double-digit growth was in the first quarter of financial year 2014-15.
To be sure, the U.S. dollar has appreciated 11.5 percent against the rupee since the first quarter of FY15.
Broking firm CLSA attributed the growth to a robust deal pipeline, increase in the contribution of digital services in the companies’ revenue share and, a sustained recovery in key verticals like banking, financial and retail.