IT majors lowering revenue projections for FY23 amid macroeconomic troubles

Amid macroeconomic pressures, Information Technology (IT) companies have lowered their growth and revenue projections for the current financial year (FY23). HCL has set its revenue guidance growth of 16-17 per cent for the year FY23, a report in the Times of India (TOI) said. Accenture, another tech giant, said that the clients were pausing smaller deals and there was a delay in overall decision-making.

"All of this (macro challenges) impacts the smaller deals more than the bigger deals because we're continuing to see that big transformation focus," Accenture said while announcing its financial results for the quarter ending November. HCL, according to TOI, was also facing troubles in cracking big deals. 

Accenture's consulting revenue growth moderated to 10 per cent in the last quarter against 22-32 per cent in the previous four quarters. 

HCL's CEO C Vijaykumar 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. 

"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," Phil Fersht, CEO and chief analyst at HFS Research told TOI. 

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."