Rupee fall, falling attrition, and higher employee utilization may not be able to push up operating margin of Indian IT companies as most of them are likely to report a fall in margins during the fourth quarter of FY23.
“Attrition is significantly down and almost back to pre-pandemic levels. This is very good news and will relieve some pressure on margins. That said the move to cost-cutting may further put pressure on margins but even that is likely to be mitigated as it looks like we are going to see more work go offshore which is more profitable to the service providers. All said, it’s a mixed bag with likely a modest downward pressure on margins,” said Peter Bendor-Samuel, CEO of Everest Group.