Big deals come with bigger labour costs for Indian IT services companies

Almost every large cap and midcap IT services player has reported record deals this quarter.

The December quarter results of Indian IT services companies have been quite good with growth defying estimates for most firms on the back of healthy deal wins and a strong pipeline. However, almost every company is fighting the margin pressure owing to aggressive hiring as they had to rush to meet client demands from these new projects. 

In the past two quarters of FY19, there has been a pick-up in the demand, which is forcing the Indian IT firms to increase the pace of hiring in onshore locations apart from engaging the subcontractors. As the pricing for these projects is