Indian IT Sector Adapts to Volatility

In the face of growing market volatility and bearish sentiments, Indian IT firms are revisiting the mantra of 'doing more for less'. With significant stock price declines observed across major players like Infosys, HCLTech, Cognizant, and Accenture, the sector is bracing for challenging times ahead.

US Market Dynamics and Revenue Impact

The US, contributing over 50% to the industry's revenue, remains a critical geography for Indian IT firms. However, the IT index has seen a 20% decline year-to-date, fueled by uncertainties from reciprocal tariffs. This scenario is pushing back hopes for a recovery in discretionary spending.

Strategic Shifts Towards Cost Management

Experts like Phil Fersht of HfS Research emphasize the urgent need for IT firms to pivot towards cost reduction strategies. "The focus will be on optimizing existing projects to fund discretionary or AI-led initiatives," highlighting a shift from growth models to cost efficiency.

Global Economic Uncertainties and IT Spending

Peter Bendor-Samuel from Everest Group points out the broader impact of tariffs on global IT spending. The current climate demands a focus on non-US markets and cost-saving measures to navigate the uncertainties of the new world order.