Last Friday, when Wipro met market expectations with its quarterly income, it joined the ranks of its larger peers TCS and Infosys, which, too, had beat market expectations by posting better-than-expected income numbers.
More than the income statement, it was the confidence exuded by the Big 3 IT firms that indicated that the sector is once again on growth path.
Analysts feel revenue from banking and financial services for these firms is at least steady. This is important as banking, financial services and insurance still accounts for more than half of revenues for these firms.
And though the three gained from the falling rupee (against the dollar), their incomes grew dollar terms as well.
Then, the US economy is slowly inching its way out of recession and there are indications that companies there are willing to spend more on IT. That, means more deals.
“Worldwide, IT spending is projected to total $3.7 trillion (Rs 220 lakh crore) in 2013, a 2% increase over the 2012 figure of $3.6 trillion (Rs 214 lakh crore),” a recent report by research firm Gartner said.
“Though first quarter of every fiscal year is traditionally good for companies, the management of all these three firms appeared more confident about their deal pipeline this time when compared to last year,” said Ankita Somani, an analyst at brokerage firm Angel Broking .
A day before announcing its quarterly results, Wipro’s chairman Azim Premji said though Indian IT industry may find it difficult to go back to annual growth rates of 30%, it will continue with strong double digit growth rate.
That means Indian IT companies, particularly the Big 3, can continue to look forward to robust growth.
And since their base is now large, the absolute growth figures could be pretty impressive.