Headwinds from the West

Weakening global discretionary spend makes IT industry cautious

The results of the Indian IT majors have largely matched the consensus expectations for the quarter ended June 2022 (Q2, FY23). However, the management guidance in most cases shows a certain degree of caution, and firms admit to the deteriorating macro environment, which could hurt demand. In addition, industry-specific attrition rates remain elevated, with all the majors experiencing well over a 20 per cent churn in personnel. The operating margins are expected to be more or less flat through the second half of FY23 despite some improvements in Q2. Despite the weakening rupee equation versus the dollar, the revenue guidance