India's revenue growth in IT exports is expected to fall to single digits in the current fiscal, says industry veteran Kris Gopalakrishnan. When asked about industry body NASSCOM forecasting 10-12 % export growth, he said the growth is likely to be in the range of seven to nine %. But he hastened to add that it's his "guesstimate" rather than an estimate. 2016-17 is not the most challenging year for the Indian industry, but the year 2008 was, said the former President of CII.
In the short-term, growth for Indian IT companies is going to be unpredictable and choppy, and the impact would be company-specific depending on client spending, exposure to a particular region and industry vertical, he said. He noted that even under the current tough and challenging times, Indian companies are the most profitable, and are still growing. "Yes, the growth is less than before but they are still growing," he told PTI in an interview.
Gopalakrishnan, one of the co-chairs of the World Economic Forum in Davos in January 2014, said the impact of Brexit would be felt over the next two-three years. Hiring in the IT industry would slow down and additional factors like increasing automation, artificial intelligence and robotics are impacting recruitment, he said.
"In the medium to long term, growth should come back. An industry which is about USD 150 billion, (including exports of USD 120 billion), growth of 7-8 per cent is a significant growth," said former CEO and MD of Infosys. In absolute terms, a USD 10 billion growth is significant, and it is more than what startups are adding in terms of revenue, he said.
"In terms of recruitment, that USD 10 billion will translate to a lakh of jobs at least." In the medium to long term, Gopalakrishnan said he is optimistic about the growth prospects of the Indian IT sector. "The industry has faced these challenges before and has come out successfully and even these (current) challenges it will manage. It will come out successfully, it has the experience of 2008 which is not that far back," he said.
Indian IT companies should focus on new growth areas in terms of continued move to digitisation, artificial intelligence and Internet of Things, which are promising, and build relevant skills to create revenue streams in the areas. "That's the reason I am optimistic about medium to long term prospects of the industry," he said.