IT Majors To Lower Growth Projections For FY23 Amid Global Macroeconomic Troubles: Report

HCL has set its revenue guidance growth of 16-17 per cent for FY23 and another IT giant Accenture has said that the clients were pausing smaller deals and there was a delay in overall decision-making

Several major information technology (IT) firms are expected to lower their growth and revenue projections for the ongoing financial year (FY23). According to a new Times of India (TOI) report, commentaries by IT companies show the impact of global macroeconomic pressure. HCL has set its revenue guidance growth of 16-17 per cent for the year FY23 and another IT giant, Accenture has said that the clients were pausing smaller deals and there was a delay in overall decision-making, the report said. 

HCL's CEO C Vijaykumar has recently said that the spending on hi-tech and telecom verticals was lower than expected and with price changes, it is going to be a big macroeconomic challenge. HCL is facing trouble in cracking big deals, the report added. The company's Q2 results announced in October showed that HCL Tech did not add any new clients in the $50 million and $100 million baskets during the quarter. However, the company added three clients in the $5 million basket and 10 in the $1 million basket.

The company had said that the deal momentum and pipeline remains strong, it looks like there are challenges in closing large deals.

Accenture, while announcing its financial results for the November quarter, said, “All of this (macro challenges) impacts the smaller deals more than the bigger deals because we're continuing to see that big transformation focus.” Consulting revenue growth of Accenture moderated to 10 per cent in the last quarter compared to 22-32 per cent in the previous four quarters.

CEO and chief analyst of HFS Research Phil Fersht told TOI, “There are some large 'consolidated deals' out in the market as firms look to bring more services under one provider to drive down costs and beat inflationary pressure. I expect to see some large deal announcements in Q1FY23.” 

On the IT sector, ICICI Securities recently said, "Indian IT services should be accumulated when the US macro is at its maximum pain and next 6-9 months (or further de-rating of 10-15 per cent in index) will give investors a good opportunity to accumulate preferred bets... We expect margins for IT to remain range-bound in FY23."