Indian IT On Growth Despite Ukraine Crisis

Market leader TCS kick-started the earnings season with a good set of numbers on Monday. After global major Accenture, TCS' 4th quarter and FY22 performance indicate that the demand environment globally remains strong.

However, the recent events such as Russia-Ukraine conflict and the subsequent rise of commodity prices raising the fears of a hyperinflationary environment, the management commentary from TCS painted an optimistic growth prospect for FY23.

The company believes that there may not be much 2nd order impact from the Ukraine conflict. In times of recession, technology can be used to cut costs for enterprises. Therefore, any negative impact of the war on global enterprises will increase their spending on technology in order to save costs and operate more efficiently.

In this regard, the Indian IT industry seems to be in a good spot. Though there are many unknowns in any war-like situation, domestic IT players are hopeful to tide over those challenges.

While the pipeline of outsourced contracts remains healthy, there is a strong likelihood that Indian IT firms will face cost pressure in the current financial year.