Prospects brightening for MSMEs in ITeS, shows CRISIL SME Tracker

The micro, small and medium enterprises (MSMEs) in information technology-enabled services (ITeS) industry is estimated to grow 7-9 per cent in rupee terms to Rs 4.2 trillion this financial year, driven by a strong order pipeline and minimal impact of the global economic slowdown that had impacted it last financial year.
 

Growth will be supported by resumption of deferred projects and new orders from key segments such as banking, financial services and insurance and manufacturing.
 

MSMEs which comprise 30-40 per cent of the industry, are largely into customer relationship management (CRM) services, which account for three-fourths of the revenue pie and are poised to benefit from a shift towards non-voice revenues. 

Among the other ITeS segments, transaction services will expand on the back of increasing digital payments. Knowledge services, too, are evolving with a greater focus on analytics-driven offerings.
 

Employee growth in the industry is expected to remain modest at 0-1 per cent this financial year as companies take a cautious approach, delaying discretionary projects and focusing on internal programmes aimed at improving cost efficiency 

and skill development rather than scaling up through large-scale hiring.
 

Next finacial year, the industry is expected to grow 8-10 per cent, driven by an increase in global outsourcing and offshoring for cost savings. Additionally, the health care and travel segments are expected to see double-digit revenue growth, further strengthening the industry.