Rising inflation, travel costs to bite into IT firms' margins: Analysts

Analysts are turning cautious on the information technology (IT) stocks as they expect the rise in inflation in the US, coupled with increasing travel costs for these companies to eat into the companies' margins going ahead.

This rise in inflation in the US, according to analysts at Jefferies, is one big factor that will see most IT companies hike wages going ahead. For Indian IT services firms, onsite employees form around 25 per cent of overall workforce, but nearly 60 – 70 per cent of their overall employee costs, Jefferies said.

"Over the past six months, the US inflation rate