'Strong rupee, H1B visa issue will lead to onset hiring in IT'
NEW DELHI: Stronger rupee and H1B issues will have the most impact on IT companies in financial year 2017-18 and lead to onset hiring, says a sector analyst.
"Going into FY18, you'll have two challenges. One is the stronger rupee and the other is the H1B issues which will have lead to companies to higher onset hiring. The sector is in a very tough shape to go into the first quarter of the next year, that is, first quarter of FY18, because you'll have wage hikes when you have a stronger rupee," Madhu Babu, IT analyst at Prabhudas Liladher said.
"So if rupee moves to 65 (against dollar) and stays there at that level, I think that would have a negative impact on the margins as well as possibly on the earnings," he added.
Babu said the companies are cautiously looking at increasing onset hiring.
"Once you do hire onset, that is negative for the margins because onset margins are usually lower compared to the off-shore. And second is that onset hiring if you hire more of locals, your onset localisations will also be impacted. So you are having companies trying to cautiously they themselves trying to increase the onset and break lose their dependency on visas," he added.
"Going into FY18, you'll have two challenges. One is the stronger rupee and the other is the H1B issues which will have lead to companies to higher onset hiring. The sector is in a very tough shape to go into the first quarter of the next year, that is, first quarter of FY18, because you'll have wage hikes when you have a stronger rupee," Madhu Babu, IT analyst at Prabhudas Liladher said.
"So if rupee moves to 65 (against dollar) and stays there at that level, I think that would have a negative impact on the margins as well as possibly on the earnings," he added.
Babu said the companies are cautiously looking at increasing onset hiring.
"Once you do hire onset, that is negative for the margins because onset margins are usually lower compared to the off-shore. And second is that onset hiring if you hire more of locals, your onset localisations will also be impacted. So you are having companies trying to cautiously they themselves trying to increase the onset and break lose their dependency on visas," he added.
