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Indian IT business growth is expected to moderate in the fourth quarter of FY22, as evidenced by Q4 quarters historically. Margins are expected to suffer due to the continued rise in labor costs. The demand environment remained solid, driven by the continued momentum of transactions led by sectors such as banking, financial services and insurance, etc.

There would be cross-currency headwinds in the quarter, which will reduce dollar revenue to some extent for the quarter.

Enterprises continue to see favorable demand (recent Accenture commentary and outlook suggests) in terms of investing in new technologies like cloud transformation (according to Accenture commentary, only 30% of applications have been migrated to the cloud, suggesting a long tail of cloud transformation to come), artificial intelligence/machine learning, blockchain (according to information from CB, $25 billion has already been invested by blockchain companies in CY21), which should further stimulate demand in the coming quarters.

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