New Delhi, October 13, 2013: Talk to any analyst and he’ll in all probability say that the best bet in today’s times is technology. Reasons are many, from the depreciation of the rupee to the overall demand environment.
“Mobile internet, online transactions and so on … we are very optimistic and very active this year,” he says.
The venture capital firm plans to investment Rs 8,500 crore in India. “We are looking to invest Rs 1,000 crore this year,” Shailendra adds.
Going by global trends, it is India that seems to be having the best of the IT world.
“This year, we are seeing a unique phenomenon where despite global IT vendors like Accenture, or even the ERP services players like Oracle or SAP, not having a great quarter; the Indian IT is disproportionately benefiting from certain trends in the demand environment. These trends include great demand for short-term discretionary projects, lot of demand for offshore services and things like that,” says Sandeep Muthangi, Vice-President (Research) at IIFL Institutional Equities.
“But then, we should also keep in mind that this quarter companies will in general be impacted by the cross-currency headwinds. The US dollar has appreciated a lot against the emerging market currencies and also against the Australian dollar. Infosys has a lot of exposure to the Australian dollar. So, that will impact the dollar revenue growth rates, a bit yes, in general. I expect things to be better than last quarter for Infosys,” he adds.
Looking forward, experts say the IT sector looks promising and advise investors to stay put given the future the sector has in store for it.
“If we are looking at global growth happening over the next one-two years, things could improve a bit from here for Indian IT companies. So, I as an investor would remain invested and would advise investors to do the same,” says Mehraboon Irani of Nirmal Bang Securities.
“IT is one sector along with select pharma and select consumption stocks where investors need to remain invested. And because the options are not too many, and considering the fact that these big names like Infosys, HCL Tech, Wipro, also I would say and TCS, have continued to perform well in global environment which has not been very conducive for growth … full marks to them,” he adds.
Why are analysts gung-ho about the IT sector?
“There are significant demand tractions in the US in the BFSI vertical and in the discretionary space, primarily driven by SMSE technology. There is a significant uptick in the IMS space in Europe,” says Sandip Agarwal of Edelweiss Financial Services, giving a view ahead of Infosys results which are due on Friday. –The Economic Times
