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Has IT attrition peaked, can margins expand? What Elara's Apurva Prasad thinks

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Has IT attrition peaked, can margins expand? What Elara's Apurva Prasad thinks

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As we enter the earnings season, the IT sector is set to report results from next week. CNBC-TV18 spoke to Apurva Prasad of Elara Capital to put the spotlight on some key questions – has IT attrition peaked or are closed to peaking, can margins expand in FY23 after declining in FY22 with the sector trading at premium valuations post the outperformance and what should investors do?

As we enter the earnings season, the IT sector is set to report results from next week. CNBC-TV18 spoke to Apurva Prasad of Elara Capital to put the spotlight on some key questions – has IT attrition peaked or are closed to peaking, can margins expand in FY23 after declining in FY22 with the sector trading at premium valuations post the outperformance and what should investors do?

On margins Prasad said, “Margins should reflect more of flattish trajectory in the near-term. There are sort of multiple tailwinds and headwinds that are playing out.”
Offshoring has spiked up over the past few quarters, they believe there is room for that to increase further.
Prasad believes that FY23 growth will taper off from FY22 levels which had the base benefit. “We do suspect tier I to be delivering low-teens and mid-tier close to 20 percent and that trajectory can fold out for the next few years.”
For full interview, watch accompanying video...
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