3rd Wave Of Outsourcing Boom Hits India: TCS, Infosys Will Get Maximum Clients (But How?)
There is a major possibility that the critical condition that the COVID-19 disease has created in India will lead to outsourcing for the Indian IT industry.
A report by Goldman Sachs says that this will be the third wave of outsourcing in this millennium.
A previous report by Kotak Institutional Equities also predicted that Indian IT companies TCS and Infosys are expected to profit the most.
Read on for more details!
COVID-19 Causes 3rd Wave Of Outsourcing In India; Third Wave In The Millennium
As per a recent report by Goldman Sachs, outsourcing and even offshoring due to a financial crisis is not new for India. In 2008 and during the Y2K situation too, India was at the receiving end of a high number of technology roles from all over the world.
“We believe these digitally trained employees at Indian IT firms are likely to drive overall revenue growth, which would be the key reason for their increasing relevance amid the requirement for digital-at-scale solutions,” the report added.
The primary reason for this might be the low wages that asked for by the technology developers in India as compared to other countries, and also the ever increasing number of engineering graduates every year.
Additionally, as the country adopts the work from home model, it has become the largest beneficiary with a compounded annual growth rate (CAGR) of 37 percent to over 600,000.
The report has also estimated a revival of growth in FY22 and FY23 for the top Indian IT firms, especially after the sharp decline of 2.7% in USD revenues. The growth for these companies has been predicted to be at 12.6 percent (in average) in FY22, whereas the earlier estimate was 9.7 percent.
All IT Companies To Profit; But TCS To Get Maximum Clients; Here’s Why!
Tata Consultancy Services (TCS), Infosys, HCL Technologies, and other IT companies are bound to be profited from this; TCS even more so than the rest.
The report clarifies, “We see TCS as one of the largest beneficiaries of these trends given its wide array of services and capabilities, geographic presence, wide client base, consistent strong execution and ability to work remotely at a large scale with c.450K employees.”
TCS’s chances of being ahead in the race are due to the companies’ greater market share in healthcare than that in manufacturing. The report states that this will be an opportunity for IT companies to double the market share for Indian IT companies, deliver double digit growth in revenue and push their margins as well.