Revenues of Indian Public Tech Firms Grew 4.5% QoQ, 17.8% Annually: Nasscom

Indian public technology companies revenues increased 4.5% sequentially and 17.8% annually, with digital and cloud remaining the major drivers, according to National Association of Software and Services Companies (Nasscom) “Quarterly Industry Review”. It included that companies expect to grow in double digits going forward.

The report covers the second quarter of FY22, ended September 30, 2021.

Digital revenues at the companies soared 10.2% sequentially, while the share of digital business in the revenue pie of select companies grew to 56.6% during the quarter.

Increase in revenues across all the major markets continued consecutively as well as year-on-year. Revenues from India bounced back this quarter, growing 8.1% QoQ.

Among business verticals, all sectors continued to witness growth both sequentially and annually. Manufacturing led in terms of sequential growth, while BFSI continued lead on annual growth, while Travel and Hospitality showed a robust rebound.

Net margins remained to fall sequentially primarily driven by salary hikes, new hires, increased sub-contracting costs as well as travel and facility costs. This quarter, y-o-y margins also declined as talent availability remains to put pressure on hiring, retaining and sub-contracting costs.

Net client addition kept a confident trend with most companies witnessing new additions during the quarter. Revenue per client continued to increase on a sequential basis supported by high growth in revenues.

Though, talent availability driven by increased attrition continues a key challenge that companies remain to address on priority

Employee count grew 5.3% sequentially, and was up 17.5% year-on-year as hiring remained the key strategy to counter talent availability. Also, as the demand environment remains healthy, companies’ plans to hire more in the next few months of 2021.

Utilisation levels across companies maintain to trend at record high levels.

Attrition remained to rise, reaching 19.3% this quarter, up from 17.5% last quarter. This increase continues to be driven by the growing demand for new-age digital skills across industries. Firms continue to counter this trend through increased fresher hiring and aiming on reskilling and upskilling their current workforce.

Overall, firms are keeping expectations of a double-digit growth guidance for FY22. The confidence continues to increase this quarter as well with most companies that report guidance revising it upwards from last quarter.