Digital deals propel IT revenues; higher salaries to dent profits in FY22

Indian IT services companies are likely to post a 9-12 per cent revenue growth in USD terms in FY22, helped by the strong demand for digital deals, a report said on Tuesday.

However, the same will not translate into profits, because higher salaries will result in the operating profit margins for the same set of companies to come at 23 per cent from 24.2 per cent in FY21, domestic rating agency Icra said.

The IT sector is one of the few sectors that have not been deeply impacted by the pandemic. IT companies are concerned about talent retention in the future as the demand across the world for their services continues to grow.