WE ARE SURROUNDED BY IT, TIME TO BENEFIT FROM IT?

WE ARE SURROUNDED BY IT, TIME TO BENEFIT FROM IT?

Covid -19 has impacted many businesses and IT is one among them. The recent results indicate stagnate business growth in the last quarter and some major companies have reported less profit growth. Though growth and profits were muted but the guidance for next quarters was very encouraging especially TCS and Accenture. Below is the quote from Mr. Rajesh of TCS from his recent results commentary:

“What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle,” says Rajesh Gopinathan, CEO & MD, TCS.

What are the Drivers behind this strong commentary:

Increase in Internet users to 850 million by 2025 current users are around 630 million

India to become $ 1 trillion Digital Economy

34 Billion Digital transactions currently and expected to reach $1trillion by 2023

Bharatnet to provide basic broadband connectivity to nearly 6 lakhs plus villages.

Apart from the above, lot of Government measures  like 100% FDI , Setting up Software Technology Parks of India, National Task force on IT & Software Development etc should work in favour to Indian Tech Companies.

The Covid-19 pandemic has magnified the extent of reliance on Technology in every aspects of Economy and our Life. And this has really created a positive disruption. The following applications will surely have a positive effect of this Pandemic.

1. Communication & Collaboration solutions will see a significant uptick in demand and usage.
2. Security solutions as lot of people migrating to Work from Home or work from some remote locations.
3. Cloud technologies have become essential for many companies to operate remotely and engage with all stakeholders

The affect effect of this disruption cloud play out positively for Tech companies, the primary one which we are currently witnessing – direct consequences due to the pandemic and self isolation. And future change in the way consumers and corporates continue to leverage technology for their regular activities.

We need to wait whether the above factors have a positive impact on IT sector.

Happy Investing!

RaVi

Disclaimer: Views expressed cannot be construed to be a decision to invest. The statements contained herein are based on current views and involve known and unknown risks and uncertainties. The recipient(s) before acting on any information herein should make his/her/their own investigation and seek appropriate professional advice. I am a Mutual Fund Distributor and not SEBI registered Investment Advisor. The above post is my thoughts and not an advise for Investment.