IT industry salaries, wages continue to give margins a run for its money

The industry's core operating margins (that exclude other income) declined to 22 per cent of net sales in Q2FY24 from 22.4 per cent a year ago and the five-year average of 23.6 per cent of net sales

IT (information technology) services companies have put the brakes on salary hikes but it may not be enough to restore their operating margins to the recent highs.
 

The combined expenses on salaries and wages of listed IT companies such as TCS, Infosys, HCL Tech, and Wipro were up just 9.8 per cent in Q2FY24, growing at the slowest pace in the last 10 quarters and down sharply from the 22.3 per cent year-on-year (Y-o-Y) growth in Q2FY23 and 14.8 per cent Y-o-Y growth in Q1FY24. But the industry’s salary and wage bill continues to grow faster than its net sales,