Despite the impending dark overtones cast on India’s IT sector, the reality on the ground is far from anything bleak. Irrespective of the announcements from US president Donald Trump, Brexit concerns and the slowing global economy, the IT sector seems to have factored the low spell and will be only marginally impacted. The sector will likely grow 8-9 percent in FY2017E and could grow at same pace or accelerate in FY2018, according to a technology report from Kotak Instituitional Equities released a week ago.
“It all depends on how deeply invested you are,” says Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound Research. “It is not going to be easy for the companies, its investors to accept new business models in this scenario. There is investor pressures internally,” he pointed out.
Upfront payments for contracts may change to pay-as-you-go, predicts Gogia. “The Indian market will not be enough as a sole market to cover costs. That is a reality that has to be factored in,” says Gogia.
To read the detailed research note on this topic by Greyhound Research, click here.