INSUBCONTINENT EXCLUSIVE:
By DK AggarwalThe information technology sector has witnessed a change in its traditional business model with the share of inheritance
business coming down with each passing year
The nature of business of the IT companies has changed and digitisation and automation have led to a change of dynamics
India is quickly becoming one of the world's greatest technology hubs.
Undoubtedly, new business models, technologies and addition of
newer markets are powering vivacious growth in the sector
India is in the middle of a digital transformation and traditional businesses are being challenged by technology-led agile enterprises
With the rise of technologies such as digitisation, block chain, cloud computing, internet of things and progression to big data,
algorithms, machine learning and artificial intelligence (AI), demand is growing for new technology-based services
Also increased focus on research development (RD) by IT companies in India has resulted in rising number of patents being filed by them,
which, of course, is good news for the sector.
There are expectations that industry spending on IT products and services will continue to be
led by sectors such as financial services (banking, insurance, and securities and investment services) and manufacturing (discrete and
process).
Over the years, verticals like manufacturing, telecom, insurance, banking and finance have been the growth drivers for the sector
Also now with the introduction of new policies for healthcare, e-commerce and retail, these sectors are expected to grow at a faster pace in
the coming years, thus accelerating revenue growth for IT services companies
Of the total business of software services provided by India across the globe, services provided through foreign affiliates of Indian
companies have steadily increased.
Meanwhile, the global economy is growing at a pace, which is at a six-year high, and global demand for
technology and business services continues to accelerate on the back of robust economic trends as many enterprises focus on all things
digital.
The changing technology landscape has resulted in shrinkage of deal sizes, bringing mid-sized and large-sized players on to a
Undoubtedly, strong demand for digital transformation and cloud-based services will continue to push the sector and going forward, it will
continuously remain attractive.
Many IT companies are now willing to shift gears according to the new challenges being faced by the sector
FIIs have added domestic software firms to their holdings in quite generously over past few months
16 per cent growth in revenues and 24 per cent growth in net profit for the first quarter of FY19.
Stocks such as TCS, Infosys, Wipro, HCL
Tech, Hexaware, Tech Mahindra and Persistent are likely to see good runup from here on.
(The author is Chairman and MD, SMC Investments and
Views and recommendations expressed in this section are his own and do not represent those of ETMarkets.com
Please consult your financial advisor before taking any position)
