JPMorgan Sees India’s IT Recovery Only by FY30

India’s IT services sector may take longer to recover than expected, according to a new report by JPMorgan. The firm now expects a strong recovery only by FY30, as artificial intelligence (AI), global uncertainty, and weak technology spending continue to affect the industry.

Advertisement

AI and Global Uncertainty Keep Growth Low

JPMorgan said India’s IT industry has recorded revenue growth of only 2-3% over the past three years. It expects this slow pace to continue because companies are using generative AI to improve efficiency, reducing the demand for some traditional IT services.

At the same time, businesses are delaying new technology projects due to economic and geopolitical uncertainty.

Because of this, JPMorgan expects large IT companies to grow by only 3-4% a year until FY30. This is much lower than the 7-8% growth the industry achieved before the COVID-19 pandemic.

Advertisement

Also Read: Ford rehired 350 engineers after AI failed to meet quality standards

The brokerage also expects companies to reduce their FY27 growth guidance as new deals continue to take longer to start.

Lower Growth Leads to Lower Valuations

JPMorgan has reduced its price-to-earnings (P/E) estimates for Indian IT companies by 10-25% because of the weaker growth outlook.

The report said the sector is unlikely to return to its earlier growth levels soon. Instead, long-term growth is expected to remain below 5%, showing that the slowdown could continue for several years.

Advertisement

India Still Depends on Imported Technology

The report also pointed to India’s dependence on imported technology as a challenge.

India imports around 90-95% of the semiconductors it uses. It also depends on foreign companies for much of its enterprise software, cybersecurity products, cloud services, graphics processing units (GPUs), and other important technology.

Also Read: Why India is Emerging as the Next Global Data Centre Hub

Although India now assembles almost all mobile phones sold in the country, much of the technology used in those devices still comes from countries such as China and Taiwan.

Government programmes like the Production Linked Incentive (PLI) scheme and Semicon India aim to reduce this dependence, but the change will take time.

What It Means for Employees

A longer slowdown in the IT sector could lead companies to hire more carefully, especially for traditional software development and support roles. Fresh hiring may remain slow, and salary increases could also be moderate.

However, companies are still expected to hire professionals with skills in AI, cloud computing, cybersecurity, semiconductor design, data engineering, and digital transformation.

Many firms are also likely to focus on training existing employees in these areas instead of increasing overall hiring.

Overall, JPMorgan believes India’s IT sector will continue to face slow growth over the next few years, with a stronger recovery expected only by FY30.

Advertisement

Note: We are also on WhatsApp, LinkedIn, and YouTube to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, YouTube – Click Here, and LinkedIn– Click Here.