Growth of IT services firms to remain in 6-8 per cent range in FY20: ICRA

PTI New Delhi | Updated on September 17, 2019 Published on September 17, 2019

Rating agency ICRA on Tuesday said growth of IT services companies is expected to remain in 6-8 per cent range in US dollar terms in 2019-20, even as their profitability declined in the first quarter on account of higher employee expenses.

The profitability of IT services companies declined during Q1 2019-20, on account of higher employee expenses, especially onsite, led by fresh hiring, sub-contracting cost and cross currency movements, ICRA said in a statement. Employee expense increased to 61.7 per cent during Q1 2019-20 from 59.8 per cent in the year-ago period for ICRA’s sample of 13 companies, it added.

“During Q1FY2020, ICRA sample companies grew by 10.3 per cent in INR terms while in US dollar terms, it grew by approximately 7.4 per cent. During the quarter, rupee depreciated by 3.7 per cent year-on-year versus the US Dollar and appreciated 1.9 per cent and 2.1 per cent versus British Pounds and Euro, respectively,” it said.

The US and Europe collectively contribute 85 per cent of ICRA’s sample set revenues.

Published on September 17, 2019
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