Goldman Sachs and CLSA have come out with their outlook on the IT sector.
According to Goldman Sachs, there are five key takeaways from the IT sector. First, the sector is likely to see double digit growth over the next 3-5 years. Second, COVID has accelerated the demand for cloud services, so that is going to provide the boost. For FY23, demand may slow down a tad bit given that FY22 is going to be strong due to pent-up demand. Third, the severe supply-demand mismatch is likely to continue for the next few quarters. Fourth, there is still mixed opinion on whether the current level of high offshoring will continue in the future. And fifth, large sized IT vendors and niche providers are likely to have an edge over midcap IT services companies.
CLSA is talking about the recent macro indicators and according to them, that is turning positive for the Indian IT space, whether it is the business sentiment indicator in Europe or US; as the economy opens up, the tech unemployment in US has further dropped to levels of 2.5 percent while technology spending has increased on a quarter-on-quarter (QoQ) basis- it currently stands at 5.8 percent on a year-on-year (YoY) basis for the five large US BFSI companies; H-1B visa approval rates have gone up as compared to the last two years; and the US dollar has depreciated versus some of the other foreign currencies, which provides a cross-currency tailwind to the IT companies.
Watch the accompanying video of CNBC-TV18’s Reema Tendulkar for more details.
(Edited by: By Dipika)
First Published: IST