Healthcare space a growth spot for IT firms
Healthcare providers slowly raising their IT budgets and ready to invest in new technology areas like GenAI
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We have been reporting growth in manufacturing. Energy, resourcesand utilities have been reporting good growth. And even Life sciences and healthcare, despite last quarter being weak, has again returned to growth - K Krithivasan, CEO of TCS, had said during the analyst call
Bengaluru: Life sciences and healthcare vertical has emerged as growth spot in the IT industry as revival in spend led to better performance in this segment during the October-December period. Management of large IT firms indicated that the trend is likely to sustain in the coming quarters, given the rebound in spend by healthcare providers.
Experts noted that post Covid pandemic, this segment had slowed down after a surge seen during the pandemic. Now, healthcare providers are slowly raising their IT budgets and ready to invest in new technology areas like generative AI.
Cognizant, which has recently seen healthcare emerging as the biggest vertical surpassing BFSI (banking, financial services & insurance) segment, reported healthy growth in this vertical.
“The healthcare ecosystem for Cognizant is the strongest in the market. It’s an industry, which will go through a significant transformation. So, we are on a pole position in healthcare- in the healthcare economy, all the way from payer, provider, pharma benefits management to Life Sciences. We have an extraordinary strength of platforms plus services,” Ravi Kumar, CEO of Cognizant, had said during the post results analyst call.
“This is going to be a sector, which will significantly transform and we have an exciting clientele base across the spectrum. We’ve invested on generative AI,” he has added.
Cognizant drew $1.396 billion revenue from healthcare vertical in December quarter as compared to $1.395 billion contributed from financial services vertical.
Similarly, Tata Consultancy Services (TCS), which drew around 11 per cent revenue from life sciences and healthcare vertical, reported 3.1 per cent growth on year-on-year basis. Management of TCS has indicated that growth in healthcare is showing early signs of revival.
“We have been reporting growth in manufacturing. Energy, resourcesand utilities have been reporting good growth. And even Life sciences andhealthcare, despite last quarter being weak, has again returned to growth,” K Krithivasan, CEO of TCS had said during the analyst call.
Another major player, Infosys reported a 6.3 per cent growth in its healthcare vertical year-on-year basis during the December quarter. It drew around 7.6 per cent of revenue from this vertical.
“We see strength inmanufacturing, energy utilities and life sciences segments. We are seeing strong traction for Generative AI programmes,” said Salil Parekh, CEO of Infosys.
United States is the biggest market for IT firms with regard to healthcare segment. With an annual spend of close to $4.7 trillion in 2023, spending in IT is slowly coming back the healthcare vertical.
