Industry Update Back
Technology: Early cues to CY18: Only so much acceleration from Digital?

  • Commentaries by IT Services biggies, healthy deal wins, a buoyant outlook on Digital,and expectations of investment pick-up all mean a sanguine growth recovery. However, revenue growth guidance by CTSH and Accenture defy that. TCS may reach double-digits, going by its commentary.
  • After two years of sluggish growth, it is understandable that the optimistic stance comes with some caution. Also, the visibility on how client spending eventually pans out is limited. Both these factors contributed to the last material positive surprise we saw inFY11, on the base of acceleration that was already guided for.
  • One key difference this time is the degree of homogeneity within the sector, which has come off in recent years. Hence, while we do not rule out 2-3pp (or even higher) growth acceleration in overall IT Services, there may be polarization in terms of beneficiaries of the same.