‘Total TCV value for deals bagged by top 4 IT rms rose 32% in FY24’

The escalating geopolitical tensions may have implications for the country’s exports as it is likely to impact global demand, apex exporters’ body FIEO said.

The uncertainties caused by the continuing war between Russia and Ukraine impacted India’s outbound shipments in 2023-24, which recorded a dip of 3.11% to $437 billion. Imports too slid by more than 8% to $677.24 billion.

“If the global situation continues to be like this, it will impact global demand,” said FIEO Director General Ajay Sahai said. “In the rst quarter numbers, the demand slowdown may be visible.”

He added that freight rates were softening, giving an indication that demand may be impacted in the times to come.

He also said that India’s rupee depreciated only about 1.3% during 2023-24 as against Chinese Yuan’s 4.8%, Thai Baht’s 6.3% and Malaysian Ringgit’s 7%.

The FIEO DG suggested the government take certain steps for exporters on the liquidity front.

“Due to demand slowdown, o take of goods will be low so foreign buyers will also take a longer period to make payments. So we require funds for a longer period. Exporters also need interest subvention support,” Mr. Sahai said.

He sought continuation of interest equalisation scheme. On December 8, the Union Cabinet approved an additional allocation of ₹2,500 crore for the continuation of the scheme up to June 30.

The scheme helps exporters from identi ed sectors and MSME manufacturer exporters to avail competitive rates on preand post-shipment rupee export credit. “The rates should be enhanced to 3% and 5%,” Mr. Sahai added.

Even as business slowed for IT rms in FY24, these

rms reported improvement in order book going from FY23 to FY24.

As per data shared by CareEdge, total deal wins for FY24 for the four IT

rms viz. TCS, Infosys, HCL Tech and Wipro were 31.9% higher in FY24 versus FY24. The cumulative order book in FY24 was $74.8 billion, whereas in FY23, the total order book was $56.7 billion.

Pareekh Jain explained, “These are mostly cost-optimisation deals. These are larger duration deals hence they have such a large total contract value (TCV) value, but they run for longer. The question is whether the IT rms will be able to convert this into rising revenues going forward.” The prevailing issue in FY24 dampening margins and revenue for IT

rms was they were struggling to turn deals into ongoing projects as clients were hesitant to start the projects in a bid to cut discretionary spending.

Less uncertainity

Experts are unclear whether these circumstances will improve much in FY25

“There is lesser uncertainty in FY25, as it is clear the threat of a recession in the U.S. market has abated for this year,” said an expert. “At the same time, the election cycle in the U.S. could be another dampening factor which may cause clients to hold o on project implementation.”

(The writer is with The Hindu businessline)