Recession is coming..? Crisis for IT companies..!? Beware...

Sowmiya Sriram
Recession is coming..? Crisis for IT companies..!? Beware...
Central banks are increasing the interest rate due to the increase in inflation all over the world. Due to this, there is a situation of recession all over the world, especially since all the superpower countries are predicted to be affected more by this recession. It is announced that it will affect indian IT companies in a big way. All of India's leading IT companies have most of their business in North America and Europe. In this situation, the US and europe will be the most affected by the recession, and indian IT companies will definitely suffer.
Market experts have predicted that the revenue of indian IT companies will be affected for the next few quarters if America, europe, and britain sink into recession. This recession will be a big burden as indian IT services companies are already facing issues of layoffs and excessive salaries. Recession fears remain high even as IT services companies show significant growth in their operating margins in the september quarter.
Kotak Institutional Equities said in its report that investors should invest in Infosys and HCL Tech to protect their IT sector investments in this economic slowdown.Infosys bagged a large project worth around $2.7 billion in the september quarter and has shown excellent growth in the last 7 quarters during this period.
 On the other hand, HCL Tech has bagged an order worth $625 million. Infosys, HCL Tech posted better-than-expected operating margin levels this quarter. Based on today's trading results data, the Nifty ID index has fallen by up to 25.60 percent in 2022 alone. Similarly, tcs has fallen by up to 14.80 percent, Infosys by 17.80 percent, HCL Tech shares by 20.50 percent, and wipro by 45.50 percent.
In the IT sector, what investors should watch out for right now is a decline in new hires, new business volumes, and employee attrition rates. According to this, the number of new hires by indian IT companies in the september quarter fell by a total of 57 percent. wipro has reduced the number of new hires by 95 percent.
HCL Technologies has an attrition rate of 23.8 percent, compared to 23 percent for wipro and 21.5 percent for TCS. So far the chances of getting new business are good.
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