Happiest Minds seeing growth in the market amid global slowdown

JP Morgan's recent CIOs survey indicated that IT budgets are expected to contract 1-2% in ‘real terms’.
KEY HIGHLIGHTS
  • Trend of the report is positive: MD & CEO, Happiest Minds
  • Have not seen any rate pressure so far and do not expect to see anything currently: Exec VC & CEO, Happiest Minds
  • Effect of wage inflation has been relatively muted: Exec VC & CEO, Happiest Minds
New Delhi: Global brokerage and research firm JPMorgan's recent CIOs survey, conducted by its US Tech team, indicated that IT budgets are expected to contract 1-2% in ‘real terms’ whereas growing 5-6% nominally over CY22/23 vs inflation of 6-8%.
Due to persistently high inflationary pressures and vigorous measures by central banks worldwide to reduce them, the chance of a recession has risen dramatically this year.
According to the 142 CIOs who participated in the study, there is a 30-31% risk of a recession or contraction in the US or Europe and a 35-8% possibility of a slowdown in growth over the next 12 to 18 months. 39% of CIOs anticipate postponing or deferring IT purchases in 2HCY22.
Venkatraman Narayanan, Managing Director & CFO of Happiest Minds Technologies believes the trend of the report is positive rather than negative. Speaking to ET NOW, he said that he would look at what a large company like Accenture has reported. He also said that a mid-sized company like Happiest Minds which is purely focused on digital is seeing growth in the market.
“In the US, we continue to see higher salaries being sustained and in fact continuing to increase. So, we have not seen any rate pressure so far and we do not expect to see anything currently,” said Joseph Anantharaju, Exec. Vice Chairman & CEO – Product Engineering Services (PES) of Happiest Minds Technologies on the impact of pricing in the current recessionary environment. He further said that the effect of wage inflation has been relatively muted as 95% of employees are in India and the only 5% in the US.
JPMorgan had downgraded Indian IT to underweight in May, highlighting risks to margin and growth expectations. A recession and deferrals in spending would drive further downside risks to its view.
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