Attrition, wage hikes to dent margins of IT firms

BENGALURU: India’s tier -1 and mid-cap IT service providers are likely to post strong revenue growth in constant currency terms for the June quarter of FY22 despite the Covid second wave hitting the businesses worldwide. However, talent crunch and two cycles of pay hikes for top firms are likely to hit their operating margins.

Top brokerages and analysts say that companies including Infosys, HCL Tech, Tech Mahindra may revise their revenue guidance for the rest of the financial year with strong double-digit revenue growth compared to previous year when the pandemic caused disruption during the corresponding period.