India’s IT Sector Likely to Face Macro Headwinds Until End 2023, Say Analysts

According to analysts, India's information technology (IT) services companies are facing challenges due to concerns of an economic recession in developed markets and the effects of a banking crisis in the US and Europe. The situation is not expected to improve until the end of the year. As a result, foreign portfolio investors (FPIs) have sold their stakes in IT companies, contributing to the sector's weakness. In March, FPIs became pessimistic about the IT and oil and gas sectors and sold equities worth ~13,734 crore between the two sectors. Due to macroeconomic challenges such as high inflation, interest rates, and a banking crisis in the US and Europe, analysts predict that the IT sector will face a few cautious quarters ahead. The primary concern for the IT sector is the slowdown in growth and the potential for a recession. As long as the global growth remains uncertain and the slowdown persists, IT companies may experience lower order flow, slower execution, and pricing challenges.