Indian IT industry can bounce back: Gopalakrishnan

On doomsday prophets writing “obit” of the Indian IT industry, he reminded that a similar exercise was done in 2008 during the global financial crisis, but the sector had recovered. “I am very confident in saying Indian IT industry will continue to be an engine for job creation. It will continue to grow and in double digits,” says Gopalakrishnan, co-founder of Infosys, where he served as CEO and MD from 2007 to 2011. 

Rejecting the perception that the single-digit growth is going to be the “new normal” for Indian IT companies, he said, “IT services growth has come down. This year (2016-17), it looks like 8-9 per cent growth rather than 12-15 per cent. Next year, it will depend on global economy. If global economy picks up, so will IT industry.” 

“Which other sector (other than IT) is creating one lakh or two lakh good-paying jobs a year? I wouldn’t say golden era of Indian IT services industry is over,” he said.

Gopalakrishnan, who served as one of the co-chairs of the World Economic Forum in Davos in January 2014, feels a 12-15 per cent growth is quite “feasible” for companies such as Infosys and TCS in “good years” while they could post a 8-9 per cent growth in the “not so good years”.

Confident of the Indian IT industry’s ability to bounce back, Gopalakrishnan, who is currently Chairman of Axilor Ventures, pointed to the factors such as size, scale, financial strength, experienced leadership, quality and global reach that will enable the process. Also, the Indian IT companies have almost zero debt, their credibility is high and they are reasonably well-governed.

An Indian IT company may slowdown owing to factors such as global economy and client problem, but these are subject to change, he opined.  

Last month, with IT companies such as TCS, Infosys and Wipro reporting tepid results in a seasonally-strong September quarter, IT industry body Nasscom was led to revise the guidance downwards against an estimated export revenue growth projections of 10 to 12 per cent for 2016-17.