New Delhi: The share of the information technology sector in the overall corporate profits hit a 21-quarter (five years) low of 9.7% in the January-March quarter, Mint reported, citing analysis of the latest corporate earnings data.
The signs of a slowdown were visible as the sector is grappling with a global slowdown and banking crisis.
The compilation was based on the recent earnings data collected from Capitaline databasefor 1,252 BSE-listed companies. This included 66 companies from the IT and IT-enabled services space, the report said.
The IT sector’s contribution peaked in 2020, during the pandemic, when firms went on a digital shopping spree, the report added.
The IT sector, together with banking and financial services, cornered 67% of the corporate profits in the quarter ended March 2020. But now it’s down to 42%, the report said.
The topline growth of the sector slowed to 12% from a year earlier from 26.5% in the quarter ended March 2022, it added.
Top technology firms have been hit by the global slowdown and are cutting down on hiring.
These companies have been laying off employees at a rapid rate, similar to the level seen during the COVID-19 pandemic’s initial impact on the global economy in 2020.
Forbes reported that India’s top four IT companies saw a net addition of just 1,940 employees in the third quarter, the lowest in the last eight quarters. Active job volumes in the tech sector have dropped by nearly 50% on a year-on-year basis, it added.
The last two years saw ambitious hiring, especially due to the pandemic. “Everyone wanted to go digital at the time, and there was a huge demand for tech professionals, which led to a lot of hiring. I believe this is a form of load-shedding,” Niraj Hutheesing, founder and director of software company Cygnet Infotech, told Forbes.