IT majors in their Q1 commentary noted that utilisation will be an important margin lever and indicated that the rates could rise higher
Indian IT firms are increasing the utilisation levels quarter by quarter and are seeing the metric as a margin lever. Human resource experts note that reduction in headcount, lack of demand visibility and the changing nature of deals are the reasons behind the surge in rates.
Utilisation rates for IT companies refer to the percentage of staff members engaged in ongoing active projects. A few quarters ago, this metric had dropped significantly. For Infosys, the utilisation rate has gone up to 81.1 percent from 80 percent last quarter. Wipro’s utilisation rate went from 81.7 percent in Q4FY23 to 84.8 per cent in Q1FY24.
Source: The Hindu Businessline
