Latest news with #NitinBhatt
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Business Standard
5 hours ago
- Business
- Business Standard
For India's IT cos, growth in Europe may only be a temporary relief
With demand for information-technology (IT) services in North America still sluggish, Europe has become a source of optimism for Indian companies because it is delivering steady gains over the past two years and continuing to outperform in the latest quarter. Yet analysts caution a full-scale revival will require a rebound in the United States (US), particularly in manufacturing, retail, and BFSI (banking, financial services, and insurance), because Europe contributes only about a third of the revenues. Companies like Infosys and Tata Consultancy Services are benefiting from large outsourcing deals, rising research & development (R&D), and increasing cloud and AI (artificial intelligence) adoption by European enterprises. For example, Infosys' growth in Europe over the past three years has far surpassed that in North America and the company's overall growth. Even in the first quarter of FY26, Europe was up 12.3 per cent, compared to North America at 0.4 per cent, on a constant-currency basis over a year earlier. 'There are consolidation deals we have won in Europe. So that has helped. And over time, Europe is also opening up from the outsourcing perspective. That is helping in growth,' Infosys Chief Financial Officer Jayesh Sanghrajka told analysts. The company is also benefiting from a pipeline of large deals in the continent. Experts say European enterprises historically invested just a fifth of what US firms allocated to tech R&D. In emerging areas like AI, private investment in the US outpaced that in Europe by three to four times, contributing to higher costs and slower modernisation across industries. Nitin Bhatt, partner and technology-sector leader, EY, said IT expenditure in Europe was expected to grow 8-10 per cent in 2025 over the previous year, marking the strongest annual growth since the pandemic. 'The narrative is shifting. Over the past few years, European companies have accelerated their R&D investment, with growth rates surpassing those of US firms for the first time in over a decade. Key sectors, such as manufacturing, banking, and public services, are embracing cloud and sustainability-linked initiatives to digitise operations and enhance competitiveness. Early adopters, particularly in financial services, have demonstrated the value of offshoring critical functions, leading to the broader acceptance of outsourcing across industries,' added Bhatt. TCS separates UK revenue from what it earns in continental Europe. UK revenue was up 4 per cent and continental Europe 0.7 per cent, while North America was down 1.8 per cent. 'With the trade uncertainty and the new spending on defence stimulating the economy, Europe has become a more attractive market for Indian firms,' said Peter Bendor-Samuel, founder and executive chairman, Everest Group. Wipro, whose fortunes have moved the other way, has been hit by some of its client-specific problems in the continent. The company, however, expects to return to trajectory from the third quarter as soon as revenue from the $500 million Phoenix deal kicks in. 'The growth drivers for IT companies in Europe include rising need for cost-optimisation deals to reduce tech spend, technology adoption as European firms aim to build tech capabilities to maintain sovereignty, and reducing dependency on the US. Key sectors powering growth are manufacturing in Germany, shipping and logistics in northern Europe, and financial services across the continent. Demand is particularly strong in cloud computing, generative AI, digital transformation, and cybersecurity,' said Gaurav Vasu, founder, data intelligence firm UnearthInsights. Sanghrajka said it would be difficult to ascertain whether Europe would continue growing. When asked if the geography was only a fall-back option till the larger market gets its mojo back, Bendor-Samuel said: 'This looks less like a permanent shift and more like Europe being on a stronger trajectory at this time,'
Time of India
18 hours ago
- Business
- Time of India
US' 25% tariffs to hit IT sector? Workforce, input costs in spotlight – what EY analysis says
Representative AI image The US tariff implementation of 25 per cent, while not directly affecting Indian IT services, could have significant consequences as US firms might reduce their technology expenditure due to increased costs, according to EY India's Technology Sector Leader Nitin Bhatt on Thursday. This development coincides with the Indian IT sector already facing economic uncertainties and the rise of Artificial Intelligence (AI). "While the Indian IT services sector isn't directly hit by the newly announced 25 per cent US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered," Bhatt said, as quoted by news agency PTI. Organisations that adopt hybrid delivery approaches, expand their geographical presence, and implement AI extensively will be better equipped to handle demand fluctuations and take leadership positions in an increasingly complex global environment, according to Bhatt. TCS, India's premier IT services organisation, plans to reduce its global workforce by over 12,000 professionals, representing two per cent, this year. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Is this legal? Access all TV channels without a subscription! Techno Mag Learn More Undo The company frames this as part of its strategy to become a future-ready organisation, emphasising technology investments, AI implementation, market growth, and staff restructuring. Industry analysts suggest that the redundancies at TCS could create widespread concern across the technology sector. The leading Indian IT service providers recorded single-digit revenue growth in Q1FY26, following a challenging June quarter. Global technology demand and client decision-making have been affected by economic instability and geopolitical tensions. TCS Managing Director and Chief Executive K Krithivasan recently acknowledged experiencing "demand contraction" due to ongoing macroeconomic and geopolitical uncertainties, indicating that FY26 revenue growth would not reach double digits. Krithivasan noted that the decision-making delays observed in the previous quarter have "intensified", expressing hope that discretionary spending, crucial for IT companies' revenue growth, would resume once uncertainties diminish. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Time of India
21 hours ago
- Business
- Time of India
Fresh pain for IT companies as US tariffs threaten revival
BENGALURU: Even as the Indian IT sector looked forward to improved trade clarity by August, potentially boosting US consumer spending, the announcement of 25% tariffs threatens to dampen sentiment and curb discretionary spending, which was only beginning to show signs of recovery. The firms' lacklustre performance was attributed to weak macroeconomic conditions, cautious client sentiment, and delayed decision-making. Nitin Bhatt, technology sector leader in EY India, said, "While the Indian IT services sector isn't directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced. Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025
Time of India
a day ago
- Business
- Time of India
Indian IT recovery at risk from US tariffs
Bengaluru: Even as the Indian IT sector looked forward to improved trade clarity by August, potentially boosting US consumer spending, the announcement of 25% tariffs threatens to dampen sentiment and curb discretionary spending, which was only beginning to show signs of recovery. The IT firms' lacklustre performance was attributed to weak macroeconomic conditions, cautious client sentiment, and delayed decision-making. Nitin Bhatt, technology sector leader in EY India, said, "While the Indian IT services sector isn't directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered. Companies that pivot to hybrid delivery models, diversify geographically, and embed AI at scale will be better positioned—not just to weather demand volatility, but to lead in an increasingly fragmented and uncertain global landscape." Coming out of the earnings season, Indian IT firms maintained a largely cautious tone amid ongoing macroeconomic uncertainties. In the recent earnings calls, when asked about the reasons behind the bearish commentary and demand contraction, TCS CEO K Krithivasan explained that consumer industries are more impacted by tariffs, with manufacturing and auto sectors also significantly affected. However, he said industries like banking are not directly impacted but experience second-order effects due to low consumer confidence. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru Infosys CEO Salil Parekh noted during the earnings that while macroeconomic conditions remained uncertain—particularly in sectors like logistics, consumer products, and manufacturing—clients were increasingly focused on cost optimization and enterprise AI.
Time of India
a day ago
- Business
- Time of India
Indian IT sector not directly hit by US tariffs, yet ripple effects could be substantial: EY India
Though the Indian IT services sector is not directly hit by the newly-announced 25% US tariffs on goods, the ripple effects could be "substantial" as rising input costs may prompt US companies to scale back discretionary tech spends, Nitin Bhatt, technology sector leader at EY India said on tariff announcement comes at a time when the export-led Indian IT industry is grappling with macroeconomic uncertainties and the advent of Artificial Intelligence (AI)."While the Indian IT services sector isn't directly hit by the newly announced 25% US tariffs, the ripple effects could be substantial. Rising input costs may prompt US companies to scale back discretionary tech spending. Simultaneously, growing unease around workforce mobility and evolving digital taxation frameworks could redefine how cross-border services are priced and delivered," Bhatt that pivot to hybrid delivery models, diversify geographically, and embed AI at scale will be better positioned, not just to weather demand volatility, but to lead in an increasingly fragmented and uncertain global landscape, Bhatt pointed largest IT services company TCS is preparing to lay off over 12,000 professionals, or two per cent of its global workforce this year, in what it describes as a broader strategy to become a 'future-ready organisation', with a focus on investments in technology, AI deployment, market expansion, and workforce watchers believe that firings at TCS ' could send fresh tremors in the tech top IT services companies have delivered single-digit revenue growth in Q1FY26, capping off a somewhat-sobering June quarter as macroeconomic instability and geopolitical tensions have weighed on global tech demand and delayed client MD and Chief Executive K Krithivasan recently said the company is experiencing a " demand contraction " due to the continued uncertainties on the macroeconomic and geopolitical fronts, and added that he does not see a double-digit revenue growth in had explained the delays in decision-making experienced in the preceding quarter have "intensified" now, and hoped for the discretionary spends - a prime mover of revenue growth for IT companies - would return once the uncertainties ebb.
