The Economic Times daily newspaper is available online now.

    IT companies lean on utilities & communication arms

    Synopsis

    Rajesh Gopinathan, CEO of TCS, said, “Communications is an even more mixed bag. While there are strong demand drivers with this whole shift to a digital operating model...on the media side, there is significant impact...”

    13Agencies
    BENGALURU: Indian IT services providers Tata Consultancy Services, Infosys and Wipro expect their communications and utilities verticals to clock steady growth, even as the core financial services, retail and travel segments, take a hit due to the Covid-19 pandemic.

    Clients in the travel and hospitality industry have already reduced existing and fresh technology services contracts. Wipro reported sequential growth in energy and utilities and its health business unit in its fiscal fourth quarter.

    Elevate Your Tech Prowess with High-Value Skill Courses

    Offering CollegeCourseWebsite
    IIM LucknowIIML Executive Programme in FinTech, Banking & Applied Risk ManagementVisit
    IIM KozhikodeIIMK Advanced Data Science For ManagersVisit
    MITMIT Technology Leadership and InnovationVisit
    However, banking and financial services, which is its largest revenue earner, declined.

    “(In segments such as) travel and hospitality, auto, oil and gas, industrial manufacturing we see higher impact. Communication, insurance, utilities will see lower impact. Consumer goods sector sees a change in demand, and they will continue to work well,” said Bhanumurthy B, chief operating officer of Wipro.

    Infosys, India’s second largest IT services provider, said banks are expected to lower interest rates and insurance companies will receive lower premiums, impacting its revenue in the near term.

    12

    All sectors will be hurt in the near term, but some such as communications will do well, it added. “Retail, travel and hospitality, energy, oil and gas are most impacted. BFSI is going to be impacted in the near term…Communication is doing reasonably well,” said Pravin Rao, COO of Infosys.

    TCS has not yet called communications a ‘defensive’ segment yet despite the communication and media segment clocking 9.3% growth in revenue in the fourth quarter.

    Rajesh Gopinathan, CEO of TCS, said, “Communications is an even more mixed bag. While there are strong demand drivers with this whole shift to a digital operating model...on the media side, there is significant impact...”

    He added, “Closure of amusement parks and other such facilities is also having a lot of impact. Closure of studios and the lack of new content will have downstream impact.”
    The Economic Times

    Stories you might be interested in