New Delhi: The last quarter was marked by losses at the tech giants InfosysHCL and TCS by 21%, 9% and 15%, respectively. Some experts believe that rising interest rates may contribute to a global economic recession, which affects a significant part of the economy. Fintech and tech stocks both saw declines in 2022. However, others argue that a correction was needed and that many of these stocks were overvalued. To understand the future of these IT stocks, it is important to analyze their December quarter results and forecasts, which have been revised down for all major players in the industry except Infosys. Market expert Ajay Srivastava offers his perspective on what the future holds for the IT sector.
    “One clear thing that came out is that the backlog remains strong. New acquisitions and large accounts have also been robust, especially for Infosys. I think they have a good share. happen now that they got a huge benefit from the depreciation of the dollar, the depreciation of the rupee, nearly 12% benefit came from it, which may miss next year.” The growth rate for the investors next year will not be 17% or 14%.”
    Are any of the metrics showing a breaking trend that makes you think that when analysts look at the IT pack, maybe we’re a little out of the woods?
    The IT industry is a great industry to work in. Everything is great because it has global businesses, a long-term trajectory, and dividend buyouts. However, considering what will happen to this company’s finances, you should proceed with extreme caution when making investments now. From quarter to quarter, there will be a significant problem with the growth rates of these companies as they may not benefit as much from the depreciation of the rupee dollar, which will affect their ability to grow.
    I believe some of them are working on future covers. The growth benchmark would slow even if they continued to post positive data as the depreciation of the rupee, rather than activity, was behind 12% of this rise. Therefore, it is a suitable place for a long-term investment.
    I think in the next 20-24 months you will have a hard time making money unless the NASDAQ (National Association of Securities Dealers Automated Quotations) takes a completely different trajectory. So I think it’s worth buying it. However, I would advise you to wait and watch right now for all that dust to settle. IT as a sector has faced a crisis.
    Which companies are best positioned to seize these deals, wherever they arise?
    TCS ranks among the highest in terms of profitability because, compared to all other companies, it does not have significant operating costs. So, in terms of pure margin, TCS is unbeatable. TCS has a certain magic in that they manage their margins so well despite not having a big ESOP (employee stock ownership plan) payout like most startups and other businesses. So I would say to choose TCS, a good candidate for paying dividends. Enforcer is much closer and excels at deliveries. Unfortunately, I think that’s where the list ends.
    What do you think of their positioning in terms of valuation when you look at some of these IT stocks?
    The whole market is overvalued. I think the Indian context and valuation is more about demand and supply. There is no increase in the supply of computer paper in the country. These companies do not issue capital. Most of them do redemptions and as a result they become more and more expensive as people hold onto the base holding and the index has. So, in my opinion, there is no increase in supply or demand for the paper used by these technology companies. It is falling thanks to buyouts. So technically you have a scarcity value on the shares of these companies playing out in the spot market.
    But he’s implying that if you’re a long-term investor, if it gets much cheaper, you have the right to increase it. It becomes simpler to understand the growth trajectory and how it is going to accelerate as Ajay Srivastava clarifies the state of the entire industry. He’s optimistic it will pick up, though.
    Source: ET Now

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