25th Nasscom forum: IT cos confident of beating guidance

The 25th Nasscom leadership forum started on an optimistic note and most companies are optimistic of meeting Nasscom’s guidance of 13-15 percent, CNBC-TV18 reports. Analysts were so bullish about the IT sector going forward that they were expecting atleast 16-17 percent. So, judging by that logic this is fairly conservative. All IT companies in the top seven range confirmed to CNBC-TV18 that they will be able to beat this guidance by a substantial margin.

There are couple of reasons for this optimistic. Essentially, BFSI, which constitutes roughly 50 percent of the overall IT revenues, has seen an uptick. Aside from that, Europe seems to be out of the woods and areas in the Nordic Europe, in UK seem to be picking up in terms of IT spending. So, clients are utilizing areas like digital spending, testing services, remote infrastructure, which will contribute to atleast 3-4 percent in terms of incremental revenues.

However, the only thing that seems to be a big backburner could be domestic spending. There has been a major issue with respect to the timing of deals and lack of decision making from the government. There have been several deals that have been pending. Sources told CNBC-TV18 that deals worth Rs 4000-5000 crore were pending. Most players are waiting till elections and expect some clarity after that.  In fact, growth projection that they had given for domestic was just around 9-12 percent.

So, while the global economy is recovering domestic is a smaller portion but it will impact the overall numbers if you look at the overall IT industry. Meanwhile, KPMG believes that NASSCOMs prediction is conservative. They were expecting a growth of around 18-20 percent at an average and were infact expecting digital to clock in around 7-8 percent.