Tech budgets will not rise much, says Persistent CEO Sandeep Kalra

Tech budgets set for modest growth as macro pressures persist, with firms prioritising AI, data readiness, and high-impact digital investments

Technology budgets for enterprises will not go up significantly in the near term as geopolitical uncertainties and macroeconomic headwinds continue to persist, Sandeep Kalra, CEO and executive director of Persistent Systems, said.

 

“As far as the decision making is concerned and the budgets are concerned, the budgets are not going to increase significantly. The budgets are going to be in the 0-5 per cent range increase from a larger customer perspective. They're going to spend more on the forward leaning things that make them more competitive, bring more business value and customer experience,” he said in an interaction with Business Standard.

 

Persistent, the first mid-tier IT services company to report its number earlier this week, reported a 16.2 per cent rise in fourth quarter revenue.

 

Larger rivals such as HCLTech and Wipro have cautioned that the current financial year will be more challenging as risks mount and clients go slow on traditional technology spending.

 

“From an overall macro perspective, obviously the macro is a little tight because on one side we have this war, war leads to the oil price increase that may lead to inflation, which may lead to the interest rates not coming down. So a lot of these things are linked,” Kalra explained.

 

And yet, Persistent – which reported 24th sequential quarter of growth – is yet to see any negative impact with no major delay in spending or no major rampdowns, issues which have hurt both Wipro and HCLTech.

 

The company, unlike some of its peers did not disclose its AI revenue. In an earlier interaction in January this year, the firm had stated that its AI revenue are less than 10 per cent of its topline.

 

“We are focused on the capability build around three lines. First is around the AI software development life cycle. The second pivot is enterprise data readiness, where we are working with mid to large corporations to get them ready from a data perspective. Because if your data is not clean, you can't do anything in AI. And data modernization is a big play for us. The third part is, once you have this in place, you basically work on business hyper productivity which is using agentic AI,” he added.

 

Persistent added 2,908 employees in the last year but said it is not looking to hire too many fresh engineering graduates going ahead.

 

“We will possibly have very little amount of freshers, if at all, and we will basically be working on more lateral hires in the areas where we want to invest. Senior most people will be from a differentiated product background or a data background or domain background. The junior may be lateral hires who basically are able to pick up these things fast. So at least for the next one year, we'll focus on this.”