IT Sector Revenue Expected to Grow by 3.6%
Revenue, operating profit & net profit of IT sector is expected to grow for the December 2018 quarter
Weak Rupee & robust digital sales aided IT companies
Globally, around $80 billion worth of contracts in the information technology sector are up for renewal and Indian players are expected to be major beneficiaries in the renewal space. A number of these deals are in areas such as banking, financial services & insurance, telecom, technology & communication, which have traditionally been areas of strength for Indian players. Historically, domestic IT firms have grown their market share with every renewal for the past 20 years.
According to data compiled by Bloomberg Quint, aided by weak Rupee and robust digital sales growth, Indian software services providers are expected to report the best third-quarter revenue growth in the last 2 years. While revenue is expected to grow by 3.6% in Rupee terms for the quarter ending December 2018, operating profit is expected to grow by 4% and net profit by 3.9%.
Indian software services providers are expected to report the best third-quarter revenue growth in the last 2 years.
Investors can gain exposure to the Indian IT sector via the IT Tracker smallcase. This smallcase comprises of IT & ITeS and online services companies to allow investors to efficiently track and invest in the information technology sector.
The IT tracker has returned 70.21% over the previous 2-year period compared to Nifty returns of 28.32%.
India’s GDP expected to grow at 7.3% in 2018–19
According to a World Bank report, India’s GDP is expected to grow at 7.3% in the fiscal year 2018–19, and 7.5% in the following two years, attributing it to an upswing in consumption and investment. It said that India will continue to be the fastest-growing major economy in the world creating a virtuous cycle of consumption and growth.
Investors can get exposure to the consumption theme via The Great Indian Middle Class smallcase. This smallcase includes companies that are expected to benefit from the growth in the Indian middle class.
Read about the World Economic Forum report on the Indian economy on Making smalltalk.
