Pandemic’s impact on Indian IT can be different from previous crisis

Clearly, there are no parallels to the Covid-19 pandemic in recent history. But if one has to draw inferences from the last big crisis, then the experience during the Global Financial Crisis (GFC) provides some hope for India’s IT services companies.

While, growth rates have been considerably lower since FY11 compared to pre-crisis levels, this has largely been because of the base effect.

At Tata Consultancy Services Ltd (TCS), for example, the compound annual growth rate between FY05 and FY08 (pre-crisis) stood at 36%. This halved to 18% post-crisis in FY11-FY14, and further to 9% in the next three years. Growth in the three years till FY20 is expected to average 8%.