Latest news with #IndianIT
Russia Today
21 hours ago
- Business
- Russia Today
India and UK to sign trade deal
New Delhi and London will sign a free trade agreement (FTA) when Prime Minister Narendra Modi visits Britain this week, Indian media outlets have reported. India's cabinet approved the FTA on Tuesday, the News18 website said, citing government sources. 'We are working on the legal scrubbing and other last-minute work for the FTA,' Indian Foreign Secretary Vikram Misri said on Tuesday. The UK is the sixth-largest investor in India, with cumulative investment of $36 billion. India is also a major investor in the UK, with nearly $20 billion in cumulative investment, according to official data. The deal has been in the works since 2001, but was stalled as London sought 'more favorable' conditions such as tariff reductions on goods being shipped to India, unnamed UK government officials told the Hindu BusinessLine newspaper last year. India is seeking a 'double contribution convention pact' with the UK, as per reports. Such a pact will save Indian IT professionals in the UK around 20% of their salary by exempting them from paying social security contributions for three years. This will benefit over 60,000 employees, according to the reports. Under the deal, India will reduce duty on UK whisky and gin from 150% to 75% and further to 40% in the tenth year of the agreement. Additionally, tariffs on automotive products will go down from over 100% at present to 10%, subject to a quota, a News18 report said. Reductions on import duties on cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate, and biscuits are also in the works. Once the FTA is signed, it will require approval from the British Parliament. New Delhi is also in talks for a trade deal with the US and EU.
Entrepreneur
08-07-2025
- Business
- Entrepreneur
IT Firms to Report Soft Growth in Q1, BFSI Continues to Shine
Investors and analysts will closely watch out for the FY26 revenue/margin guidance; CY25 IT budget and impact on client spending behavior amid macro uncertainties; recovery in discretionary spending; deal intake and pipeline, among others. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Indian IT services firms are likely to post another soft quarter, with continued caution around discretionary spending, delayed decision-making, and tighter project scrutiny weighing on deal ramp-ups and execution, according to a pre-earnings report by Emkay Research. Reported USD revenue may see modest QoQ growth, supported by currency tailwinds from a weakening USD against major global currencies such as the EUR, GBP, and Rupee. Tier-I companies, except Infosys and LTIMindtree, are expected to report muted constant currency sequential revenue growth in Q1. Tier-I players are expected to post constant currency revenue growth of -2 to 2 per cent, while reported USD revenue growth would be aided by 90–220 basis point cross-currency tailwinds. Tier-II companies may see constant currency revenue growth of -2.5 to 7 per cent, with tailwinds of 40–210 basis points on reported USD revenue. Among verticals, BFSI continues to show encouraging signs, while Communication and Manufacturing (particularly Auto) remain weak. Growth trends continue to be mixed across all other verticals like Hi-tech, Retail, and Healthcare, the brokerage firm said. Performance of ER&D companies is likely to be impacted by the slowdown in Auto and the tariff-related uncertainties. Emkay expects Infosys and HCLTech to narrow their FY26 revenue growth guidance to 1-3 per cent and 3.5 per cent respectively on an annual basis in constant currency, while retaining their EBIT margin guidance of 20-22 per cent and 18-19 per cent, respectively. It expects Wipro to give guidance of -1 to +1 per cent growth for Q2FY26. Key Monitorables Investors and analysts will closely watch out for the FY26 revenue/margin guidance; CY25 IT budget and impact on client spending behavior amid macro uncertainties; recovery in discretionary spending; deal intake and pipeline; pace of decision-making, project deferment/cancellation, and any client specific ramp-downs. Other factors to monitor include demand trends in key verticals like BFSI, Retail, Manufacturing, Hi-Tech, Communications; pricing environment; headcount change owing to constrained macro indicators and productivity gains from AI; and adoption and integration of GenAI. According to Emkay Research, deal intake is expected to remain healthy on the back of cost takeouts, legacy modernization, and vendor consolidation. Such deals are being prioritized, as enterprises aim to save costs and reallocate budgets toward RoI-justified outcomes. The deal pipeline remains healthy across companies. "Pace of decision making, revival in discretionary spending, and timely ramp up of signed deals could lead to better correlation between revenue and deal intake, thereby driving uptick in revenue growth," the report said. AI continues to gain strong momentum within the Indian IT services sector, influencing both internal operations and client engagements. "With the rapid evolution of Gen AI, Indian IT companies are intensifying their focus on AI-readiness. This includes strategic investments in talent acquisition, large-scale reskilling and upskilling programs, and the integration of AI into existing service offerings," the report said. A step ahead from the past, the nature of AI engagements is shifting – moving beyond POC (proof-of-concept) work and toward scaled implementations, particularly in areas like customer service, software development automation, and enterprise productivity tools. However, despite the rising interest and an expanding pipeline of Gen AI opportunities, AI's direct contribution to revenue remains limited at this stage. Most AI-related spending continues to come from reallocations within existing IT budgets rather than incremental budget expansion, indicating that AI spend is currently replacing, albiet not yet adding to, the overall tech spend. "Looking ahead, as clients gain more clarity on Gen AI's business impact and use cases mature, we expect AI monetization to improve gradually. Indian IT firms, which can effectively scale up Gen AI offerings, link such offerings to measurable business outcomes, and differentiation through domain expertise will be better positioned to capture the long-term value," the report said.
Yahoo
06-07-2025
- Business
- Yahoo
Trump's Big Beautiful Bill poses risks for Indian exporters
-- Indian exporters of auto parts and solar panels could face renewed pressure from Donald Trump's 'Big Beautiful Bill,' even as the legislation may boost Indian IT services. 'The phase of policy volatility continues, and yet again, we have the US initiating something with global ramifications,' analysts at Bernstein say on the bill and the upcoming expiry of a pause on reciprocal tariffs. The legislation includes tax cuts expected to widen the US fiscal deficit by more than $3 trillion over a decade. The U.S. House on Wednesday narrowly approved a wide-ranging tax and spending bill. Proposals to keep import duties elevated which are still under discussion, would amount to a further $1.5tn –$2 trillion in de facto tariffs, leaving limited room to scale back existing trade barriers. While the bill could spur US consumption, capital expenditure, and digital modernisation, areas where Indian tech firms stand to gain, it also introduces headwinds for manufacturing exports. The removal of incentives for electric vehicles and the bill's emphasis on petrol-powered cars could weigh heavily on Indian auto component makers. Solar equipment exports, which have recently strengthened, may also be at risk. Another problem is Section 899, which could classify India as a 'Discriminatory Foreign Country,' potentially triggering higher US taxes on Indian IT and pharmaceutical companies operating there. A proposed cut in the remittance tax to 1 per cent would have a limited impact, reducing annual outflows from the US to India by just $110mn, compared with the $38bn total. 'The downside is significant, and the oceans murky,' Bernstein said, adding that the eventual impact will depend on the final shape of tariff provisions and any potential bilateral trade deal. Related articles Trump's Big Beautiful Bill poses risks for Indian exporters Street Calls of the Week Jefferies survey of U.S. Amazon shoppers reveals key behavioral trends Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Entrepreneur
04-07-2025
- Business
- Entrepreneur
IT Services Companies Set up Dedicated GCC Service Units
The GCC-as-a-Service model enables the company to focus on its core operations while the service provider takes care of the other aspects like infrastructure, real estate, legal compliance, tech peripherals, and talent. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Several Indian IT services companies are setting up dedicated service units catering to global capability centres (GCCs) to help such centres optimize costs and create additional value. Establishing a GCC business typically requires millions of dollars of upfront investment in the form of Capex while taking between 12-24 months to set up, operate and scale. The GCC-as-a-Service model enables the company to focus on its core operations while the service provider takes care of the other aspects like infrastructure, real estate, legal compliance, tech peripherals, and talent. On July 1, LTIMindtree launched its GCC-as-a-Service offering to cater to organizations that may want to set up GCCs or scale their existing ones to optimize costs and create added value. "The catalogue covers a spectrum of Build, Operate, Transform and Transfer services, offering clients the option to pick and choose what they require," the company said in a statement. GCC-as-a-Service commercials are designed on a per-seat or per service basis to ensure cost optimization and value realization. The 'Build' component includes end-to-end support for setting up entities including legal compliance and infrastructure; under 'Operate' services include transition management, program governance, delivery excellence, and knowledge management. The 'Transform' component includes transformation enablers such as industry-specific offerings, technology solutions and frameworks. Finally, the 'Transfer' component includes structured transition services covering talent migration, capability handover, change management and knowledge transfer to ensure long-term success and continuity. Venu Lambu, Chief Executive Officer and Managing Director, LTIMindtree, said, "GCCs are becoming strategic centers for industry-specific transformation and efficiency. LTIMindtree's GCC-as-a-Service helps enterprises build, scale, and evolve their GCCs into global innovation hubs, leveraging our BlueVerse ecosystem to drive next-gen capabilities and gain a competitive edge with scalable, responsible AI." LTIMindtree's GCC-as-a-Service comes days after Quest Corp, leading provider of staffing and workforce solutions, launched Origint, a strategic service-line to help global enterprises set up, scale, and operate high-performing GCCs across India and key international market. This strategic move comes at a time when India has emerged as the epicenter of GCC growth. The country now hosts about 1,800 GCCs, with 120 new centers launched in 2024 alone. These centers contributed to 17 per cent YoY tech workforce growth, adding nearly 1.8 lakh jobs in 2024, and the market is projected to reach USD 105 billion by 2030, employing 24 lakh professionals. As GCCs evolve from cost-efficiency centers into strategic hubs of innovation, Quess said Origint serves as "a single-window solution to empower global capabilities and offers a comprehensive solution that spans blueprinting, regulatory compliance, real estate, infrastructure management, digital onboarding, AI-powered hiring, and managed operations for global enterprises. It offers bespoke solutions for firms seeking shared service hubs, tech delivery centers, R&D units, or customer experience operations." "Global enterprises are increasingly seeking more than mere cost savings — they want speed, innovation, and efficiency at scale," said Guruprasad Srinivasan, CEO & Executive Director, Quess Corp. "With Mohit Mathur joining as Chief Business Officer for our GCC business, we are scaling up this opportunity. Under Mohit's leadership, Origint is being launched, to transform capability centers into dynamic ecosystems that empower businesses to scale and thrive in a rapidly evolving digital landscape. This is more than a new service line, it's a growth engine for our clients and for Quess. Origint is our commitment to powering the next wave of enterprise transformation, not as a service provider, but as a long-term growth partner." Lohit Bhatia, President – Workforce Management, Quess Corp, said, "Over the last 17 years, Quess has built a solid foundation which further enabled us to support over 350 GCCs across 8 countries. Origint - Powered by Quess and in partnership with our demerged entities - Digitide for AI-first digital solutions and Bluspring for infrastructure management, and other key external global partners, we are making a bold bet on the future of GCCs. With this holistic approach across people, platforms, and precision delivery, we are poised to reimagine the GCC playbook." To be sure, GCCs are taking away part of the business from IT services companies as clients are reducing their outsourcing spend by setting up their own tech centres. So by building business lines like GCC-as-a-Service, IT services companies are in a way partnering with the GCCs instead of competing.
Mint
03-07-2025
- Business
- Mint
Sonata Software stares at revenue dent as Microsoft eyes direct licence sales
A global technology giant's attempts to sell its software licences directly to clients might lead to an unexpected casualty in Sonata Software Ltd, which counts that tech company as one of its five largest customers. Sonata Software, which entered Indian IT's $1-billion annual revenue club last year, is expected to get less business selling Microsoft licences, according to at least three people with knowledge of the matter. According to experts, the IT services company gets more than $500 million from selling Microsoft product licences, making it one of the only large IT outsourcers to sell such licences. This translates to almost half of its $1.2 billion revenue in FY25. 'Microsoft has talked about, or they're considering at least, going directly to a few large customers," said Samir Dhir, managing director and chief executive of Sonata Software, in an interview with Mint on 26 June. He said that the Bengaluru-based company considers this possible move as a threat. 'Is that a threat we see? The answer is, yes. Is that giving us sleepless nights? Perhaps not. It's something that we're watching cautiously. It might have a one or two quarter bump here and there," said Dhir. Analysts said Microsoft's move is aimed at cutting costs. 'Microsoft is saying that for large clients who require more than 10,000-plus licences, they will go for direct billing because it is one way of cutting costs and they probably do not want the IT outsourcers to keep the extra cut that comes from selling these licences," said Amit Chandra, IT analyst at HDFC Securities. 'This will be a gradual decision but Sonata is also de-risking it and focusing on selling more licences of other partners," said Chandra. Microsoft did not respond to Mint's queries. This move by Microsoft comes on the back of the tech company giving fewer tech services work to Indian outsourcers, including LTIMindtree Ltd, because of its own AI capabilities, according to Mint's report on 4 May. In a rare instance, Dhir called out lower revenue from one of its top clients, in a 16 April stock exchange, which Mint's report revealed to be Microsoft. He added that this is not the first time that Microsoft is trying to deal with clients directly. 'They have tried this model in the past as well. Okay, it hasn't worked. So they're trying again. It might work this time, it might not go this time," said Dhir. Sonata Software gets about 30% of its business managing back-end IT infrastructure for international businesses and the remaining 70% from selling software product licences to companies. Microsoft's licence reselling business makes up most of that business followed by Google, Oracle and other such licences. Sonata has about 7,000 employees, according to the company's management. This translates to each employee fetching around $171,428 for the company, which is the highest amongst the country's largest IT outsourcers. If indeed there is a hit in Microsoft's licensing business, it will likely dent Sonata's revenue per employee as three-fourths of the company's business comes from selling software licences that need fewer people. A second analyst attributed Microsoft's move to client sensitivity. 'Microsoft is dealing with large clients directly because these are sensitive customers and Microsoft wants to keep its own dedicated sales and support staff for such accounts," said a Mumbai-based analyst on the condition of anonymity. For now, Sonata is not perturbed and is looking to widen its client base. 'We have anticipated this. We have been working on de-risking the business in multiple ways," said Dhir. 'So we're not the top 10 Indian companies' reseller. We are a top, I would say, probably about 400 to 500 companies' reseller in India. And also, we have broadened the pyramid where we were selling (licences)," said Dhir. He added that the company is also selling software licences of other companies including AWS, Oracle and Google. Sonata has counted Microsoft as its client for more than 30 years and is among the top 1% of Microsoft's partners, according to its FY24 annual report. Microsoft, which follows a July-June financial year, ended its previous financial year with $245 billion in revenue. In other words, Microsoft is almost four times the size of Accenture Plc., the world's largest IT services company, by revenue. Lower business from Microsoft serves as a wake-up call for Sonata, which is now expected to lose business from its IT outsourcing unit to the licence reselling unit. Homegrown IT services companies work with Microsoft in two ways. One, as system integrators for Microsoft's software products. If a burger chain wants to use Microsoft's software to manage its sales and billing infrastructure, it can purchase the software from IT outsourcers like Sonata Software. Sonata will not just give the burger chain access to Microsoft's software, but will also fit the software in its computers and earn extra money. Secondly, IT service providers send engineers to Microsoft to manage its software products. These engineers ensure the functioning and backend requirements of Microsoft's software sold to companies such as the ice cream chain. For Sonata, both businesses from Microsoft are now under pressure.
