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Moderate growth rate in FY25 likely for the IT sector

New Delhi: Market analysts on Friday said that as the IT sector registers moderate revenue growth, companies have become more conservative in their forecasts for FY25, noting expected delays in project execution and closure.

The revenue growth outlook for FY25 is discouraging, with Tier 1 IT companies expected to grow below mid-single digits on average, while Tier 2 companies are expected to limit their revenue growth to the high single digits.

“However, if the spending recovery co-exists with the projected macroeconomic recovery in the near term, then we could see an upward revision in corporate estimates as they progress through the year,” said analysts at financial services organization Prabhudas Lilladher.

FY24 ended with another quarter of poor performance in the IT services area. The country’s leading IT companies saw their employment decline by almost 70,000 employees in the last financial year.