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The Indian IT services industry, a global leader in technology outsourcing, contributed 7.4% to India’s GDP in 2023, while driving foreign exchange earnings, employment, and innovation. Rapid growth, fuelled by digital transformation, AI, and automation, has also brought challenges of global competition, talent shortages, and sustainability integration. To address broader social and environmental concerns, the Companies Act, 2013 mandates that qualifying firms spend at least 2% of average net profits on Corporate Social Responsibility (CSR) activities. In IT services, CSR initiatives largely focus on education, digital literacy, skill development, and community welfare, reflecting strategic investments in human capital alongside regulatory compliance.
Despite the prominence of CSR, its financial impact remains debated, with global studies reporting mixed evidence. Limited research exists on Indian IT firms, where sector-specific dynamics may influence outcomes. This study investigates the relationship between CSR expenditure and financial performance of ten leading IT companies: TCS, Infosys, HCLTech, Wipro, Tech Mahindra, Persistent, Coforge, Mphasis, Zensar Technologies, and Birlasoft over 2019–2024. Using Return on Assets (ROA), Return on Equity (ROE), Net Profit Margin (NPM), and Revenue Growth (RG) as performance indicators, the study offers empirical insights into the financial implications of mandatory CSR practices.
Keywords:
Corporate Social Responsibility (CSR), Financial Performance, Indian IT Services Sector, Profitability, Sustainability
Cite Article:
"THE ROLE OF MANDATORY CSR REPORTING IN SHAPING FINANCIAL PERFORMANCE: INSIGHTS FROM INDIAN IT SERVICE FIRMS", International Journal of Science & Engineering Development Research (www.ijrti.org), ISSN:2455-2631, Vol.10, Issue 9, page no.a55-a64, September-2025, Available :http://www.ijrti.org/papers/IJRTI2509006.pdf
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ISSN:
2456-3315 | IMPACT FACTOR: 8.14 Calculated By Google Scholar| ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 8.14 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator