IT CEOs expect increased tech spending in 2024

CEOs of major firms like Tata Consultancy Services and Tech Mahindra express optimism, anticipating a better year than the challenging 2023

February 21, 2024

Nasscom President Debjani Ghosh urges caution, citing early 2024 uncertainties like the US and India elections and concerns about interest rates despite positive CEO sentiments

Nasscom's annual review projects a 3.8% growth in the IT sector revenue in fiscal 2024, significantly slower than the 8.1% growth recorded in the previous fiscal year

CEO of Coforge, Sudhir Singh, notes that technology companies have finalised budgets similar to the previous year, with growth driven by continued market share acquisition

Nasscom's survey indicates an expected improvement in sentiments in the second half of FY25, with tech CEOs foreseeing better revenue growth and improved hiring prospects

The technology outsourcing industry, a vital part of India’s exports and a significant component in stock indices, anticipates a more positive outlook for revenue expansion in 2024. Despite prolonged subdued demand from both sides of the Atlantic seaboard, signs of a spending revival have emerged. K Krithivasan, CEO & MD of Tata Consultancy Services (TCS), India’s largest software firm, expressed optimism, noting the presence of “green shoots in the market.” He predicts growth through deal renewals, vendor consolidation, and smaller transformation projects.

Krithivasan anticipates a more favourable year in 2024 compared to the previous one. While he doesn’t foresee monumental transformation deals, he believes that transformation budgets won’t completely dry up. Mohit Joshi, CEO and MD of Tech Mahindra, shares this sentiment, highlighting a better outlook for 2024 and noting the positive economic performance and increased focus on technology in the larger market.

However, Debjani Ghosh, President of Nasscom, adopts a more cautious stance. Despite positive CEO sentiment, she highlighted that it is too early to declare 2024 definitively better. External factors, such as the US and India elections and concerns about interest rates, contribute to the uncertainty.

According to Nasscom’s annual strategic review report, India’s information technology industry is expected to surpass US$ 250 billion in fiscal 2024. However, the growth rate has slowed to 3.8%, considerably lower than the 8.1% recorded in fiscal 2023. Sudhir Singh, CEO of Coforge, indicates that most technology companies have maintained similar budgets to the previous year, with growth driven by continued market share acquisition.

Nasscom’s survey indicates an expected improvement in sentiments in the second half of FY25, with over two-thirds of tech CEOs foreseeing better revenue growth in the next fiscal year. The hiring outlook is also expected to improve. Vikash Daga of McKinsey & Company notes a K-shaped demand pattern in IT services, with a surge in large deals driven by vendor consolidation and cost-cutting opportunities. At the same time, discretionary spending has been significantly reduced.

Source: Economic Times

Recent Articles

India’s pharma exports reach US$ 27.9 bn in FY24

April 24, 2024

In the fiscal year 2023-24, India’s drugs and pharmaceuticals exports …

Read More

Economic growth driven by strong investment demand: RBI Bulletin

April 24, 2024

In its April 2024 bulletin, the Reserve Bank of India …

Read More

Indian startups raise US$ 2 bn in Q1 of FY24: Tracxn

April 23, 2024

Indian startups managed to secure US$ 2 billion in funding …

Read More