From acquiring creative agencies, to setting up onsite innovation centres and turning around BFSI with entirely new digital offerings, 2018 had seen the IT industry going from initial lows to new highs.
Demand for digital technologies and resumption of normal economic activities will drive sales for IT companies, and the sector will post a revenue growth of up to 9 per cent in 2021-22, a report said on Thursday. Rating agency Icra gave a "stable" outlook for the sector, whose size is pegged at over $180 billion by industry lobby Nasscom, including the business process outsourcing business. The IT services sector's revenues will rise between 7-9 per cent in rupee terms and between 5-8 per cent in dollar terms in 2021-22, it estimated.
The current valuation is 38 per cent higher than the 10-year average of 22x and over 50 per cent higher than the 20-year average of around 20x.
With the economy gaining pace and large deals back on the table, chief executive officers (CEOs) of tech companies believe global tech spending will witness growth this year. According to CEO Survey by Nasscom, about 71 per cent chief executives expect global spend to grow over 4 per cent. The figure is significantly higher than the previous two years - 41 per cent and 59 per cent in 2019 and 2020, respectively. The survey also said the recovery in global tech spending will be led by the digital segment.
Stock crashes 6.5%; top 5 firms lose Rs 33,883 crore in market cap
Sensex rally was driven by Bajaj FinServ, Reliance Industries, Bajaj Finance, ICICI Bank, HDFC and Axis Bank. NSE Nifty climbed 326.50 points to end at 15,245.60.
Blackstone on Monday said funds managed by the private equity firm will acquire a majority stake in IT firm Mphasis Ltd, triggering an open offer for acquisition of up to 26 per cent stake for about Rs 8,262 crore. A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments (Office of the Chief Investment Officer of The Regents, University of California) and others will co-invest along with Blackstone, a statement said. Based on the open offer subscription, the blended purchase price will vary between Rs 1,452 to Rs 1,497 per share (12-16 per cent premium to 12-month average price and 3-6 per cent discount to 6-month average price) and the purchase consideration will vary between Rs 15,200 crore to Rs 21,000 crore (approximately$2-2.8 billion), the statement said.
Indian workforce prefers to work for companies operating in sectors like IT, followed by BFSI and retail & FMCG.
The analyst community tracking the Indian IT services industry took special note of Accenture's first quarter (Q1) performance, which showcased the rapid growth of its consulting business that outperformed its outsourcing business. Bookings indicate that the trend will continue. Consulting bookings increased 41.6 per cent year-on-year (yoy) to $9.4 billion, higher than the 17.6 per cent growth in outsourcing to $7.4 billion. The management commentary was also more bullish on the consulting business.
After last year's lull, number of offers jump by 15%.
It is imperative that young aspirants consider career options that will guarantee job security -- roles that are centred around technology.
According to Randstad Employer Brand Research (REBR) 2020, Microsoft India scored high on financial health, strong reputation and utilisation of the latest technologies. Others in the top 10 list are Samsung, Amazon, Infosys, Mercedes-Benz, Sony, IBM, Dell, ITC and TCS.
'At this moment, investors should look for relative value within sectors and clear visibility (third-wave-or-not) on earnings delivery.'
Infosys had guided for a revenue growth in the range of 11.5-13.5%, which has now been lowered to 10-12%.
While Wipro leads the pack on absolute numbers, analysts for Infosys for reporting consistent growth, revising FY22 guidance and beating TCS on revenue growth.
'For equities, inflation trending upwards but within the range of expectations can actually be a big positive as it helps earnings and may shift flows from bonds to equities.'
The top driver for the Indian workforce while choosing an employer are salary and employee benefits, followed by work-life balance and job security.
Good growth in BFSI segment, favourable currency to aid the company in Dec quarter
In July-Sept 2016-2017, TCS had missed street expectations with 7.8% growth in revenue.
While discretionary spend by global enterprises is likely to negatively impact all Indian IT firms, more revenues from products and less exposure to financial services segment are likely to lessen the impact for HCL Technologies and Tech Mahindra.
While the company will gain from enhanced scale and size following the merger with Mahindra Satyam, its ability to bag large deals will be a key growth driver.
'What has gained prominence are 'human' skills like creativity, originality and initiative, critical thinking, persuasion, and negotiation, as well as attention to detail, resilience, flexibility and complex problem-solving.'
Nasscom said growth for the current financial year (2016-17) was expected to be 8.6%
The total value of India's top 100 brands has increased by 2 per cent, from $162.1 billion in 2020 to $164.9 billion in 2021, according to the latest Brand Finance India 100 2021 report. This uplift in brand value over the course of the first year of the pandemic is an impressive feat given the global economic crisis following the implementation of national lockdowns in March 2020, when business activity was brought to a halt, affecting both production and consumption. Among the brands that came on the top of the list include Tata Group, Reliance Industries, and Mahindra Group.
Mumbai continues to be the investment hotspot for the banking and financial sector.
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Usage of mobile technology in financial service will help the financial inclusion initiative and enhance delivery systems, said the D&B report on the BFSI sector.
Of the total 381 summer placement offers at the Indian Institute of Management Ahmedabad, 24.4 per cent roles were offered by financial and banking services.
'Quality of management, corporate governance, allocation of capital, full disclosures should form the basis to decide investing in a particular stock.'
Major institutes see rise in summer placements; consulting, BFSI, e-commerce firms are top recruiters, says Vinay Umarji.
Under the new model, the IT services firm will replace the current structure of its various strategic business units, service lines and geographies with four strategic market units and two global business lines.
Revenues, profit margins will be hit in the next one year, but more demand in the longer run.
Now sole contender as L&T Infotech quits race
Auto, pharma, IT, chemicals among sectors with significant reliance on UK and European nations with Tata Motors, Motherson Sumi, Tata Steel, TCS, Wipro, Infosys and Tech M among key names.
After posting double-digit growth for the fourth consecutive quarter, chief executive officer and managing director Salil Parekh tells Yuvraj Malik and Debasis Mohapatra that the firm is not facing any delay in ramping up of large deals.
Its revenue from operations grew 2.5 per cent to Rs 13,977.7 crore
IT firm's performance shows trouble in products segment, a majority of whose share comes from Finacle
'It could tempt investors to pick stocks that are not fundamentally sound.'
Indian start-ups and software product companies are trying to attract engineers and programmers who are either stranded in India because of the lockdown or H-1B visa holders who have been laid off.
