Fundamental Analysis of IT Industry
Podcast - fundamental analysis of sectors: IT sector
Namaskar dosto! Hello and welcome back to another insightful and fun fundamental analysis special podcast by Angel Broking. Yeh podcast mein hum discuss karenge one of the two most popular sectors of the year, aur woh hai IT sector.
Mujhe already pata hai ki iss podcast ke liye kaafi log excited hongein. Given the sector’s popularity. So let’s dive in.
Jab se pandemic aur lockdown chalu hua many people have become extra curious about investing in two sectors in particular, that is pharma and IT. Pharma sector ke liye interest badh gaya hai because of vaccines and other medications linked to Covid-19. Aur IT sector investment mein interest bad gaya hai kyunki remote working ke chakkar mein IT solutions le liye kaafi demand increase hoti huyi dikh rahi hai.
Toh chaliye aaj IT sector ka fundamental analysis saath mein dekh lete hai. Aapko shayad already pata hoga ki fundamental analysis mein, sector ke revenues aur losses dekha jata hai for the last few years, aur potential for the next few years bhi evaluate kiya jata hai.
We will analyse the sector in four stages:
Pehle discuss karte hai kai figures, jisse aap sector ka current status jaan sakte ho
Phir dekhenge the industry environment
Third in line hai government ke initiatives aur contribution to the IT sector
Aur last but not least dekhenge potential aur possibilities in the IT industry
Part 1 - IT sector ki growth story
2021 mein yeh sector ne desh ke GDP mein 7.7% ka contribution de diya tha.
Lekin 2020 mein, its contribution to GDP was actually higher, standing at 8%. Of course yeh bhi admit karna zaroori hai ki at that time, there was tremendous adoption of new cloud based IT solutions and virtual conferencing and mobile apps for business as the whole country migrated to remote working.
Yeh saal mein, according to estimates, IT sector revenue is expected to close at USD 194 billion. Agar IT sector FY 2021 mein yeh revenue asal mein pa sakega, then the year on year increase in revenue could be 2.3%.
Indian private equity investors ka bhi kaafi interest hai IT Sector mein. In 2020 nearly 400 private equity deals centred on IT and BPM.
Yeh saal ke anth tak, IT sector ke exports mein modest 1.9% growth hone ki anticipation hai. Agar yeh actual mein ho gaya toh humare IT exports will reach 150 billion by the end of the year.
Part 2 - IT sector environment
More and more businesses are increasing their dependence on IT and within it, artificial intelligence. Aap trading aur investment aaj kal app se karte ho nah? Aap apna payments bhi online karte ho, bookings bhi online karte ho, insurance online karte ho, shopping app se karte ho, photos ko online edit karte ho aur us ke liye AI based apps use karte ho… all of these businesses rely on IT to provide services to you.
The rising penetration of smartphones in India is also expected to contribute heavily to increased demand for all the services that we just talked about.
Global trends dekh ke Indian companies bhi cloud computing aur cloud based accounting use karne ke liye tayar ho rahe hai. Yeh toh pre-pandemic mein hi chalu hua. The work-from-home handicaps only served to accelerate the adoption of cloud computing among Indian businesses. Agar aapko already pata nahi toh cloud computing means company ka server physical nahi, balki virtual rehta hai.
Part 3: Government support for the IT sector
Sarkar ne IT sector ke liye extended tax holidays introduce kar diya hai for Software Technology Parks of India and SEZs.
November 2020 mein, the government relaxed the rules for BPOs that will allow their employees to work remotely. The industry had initially come to a grinding stop when lockdowns happened.
Gartner kar ke ek research firm hai jo khaas IT sector mein specialised hai. Yeh company ne estimate kiya ki sarkari spending on IT will grow by 11.4% to USD 7.3 billion in 2021.
Part 4: Estimated growth and potential in the IT sector
The sector's contribution to GDP is expected to rise from 7.7% to 10% by 2025.
India mein IT sector mein USD 5 billion worth global investments aa sakte hai, according to an IBEF report. Yeh investments agle 4 saal mein hi expected hai, that is by 2025.
The USA and the UK are the biggest contributors to the demand for Indian IT services, particularly outsourced Ist services. Yeh desho ke economic recovery ke saath, India ke IT sector mein bhi growth aur revenue increase hone ki possibility hai.
Poore duniya ke IT services aur khaas outsourced IT services mein, India ka contribution 50% se zyaada hai.
Abhi toh bahut desho mein economic crisis hai. Companies across the world might put aside loyalties and look for low cost alternatives to keep their businesses afloat. Isse Indian IT services ke liye demand increase ho sakta hai. Costing in India is 1/4th of what one might see in some countries.
So should you invest in the IT sector?
Dost iska jawab aap hi de sakte ho. Consider your risk appetite and your investment horizon before making a decision. Kai stocks ko shortlist karna aur unka technical analysis zaroor karein to see if the stock is trading at a fair price - one that has the potential to increase soon. Companies ke 3 to 5 years ke financial records bhi dekh liya karo to judge for yourself the company's ability to deliver good returns. This podcast has been made for educational purposes only and the investor must do his own research as well.
Chaliye doston aaj aapse alwida lete hain, we will be discussing more sectors soon, so stay tuned, stay updated, and most importantly stay happy!
Aise aur interesting podcasts sunne ke liye humein follow karein via youtube and other social media channels. Until then goodbye and happy investing!
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