The talk of recession is making its rounds around the world. IMF has forecasted Global Growth at 2.7% for 2023 as the world is battling inflation and a high cost of living.
Foreign tech majors have been on a layoff spree with 345 companies letting go of 1,03,767 in the 45-odd days of 2023. But the Indian IT sector has shown its resilience to the global slowdown as no major layoffs have been announced.
The IT sector contributes the 2nd most weightage of 14.70% in NSE’s NIFTY 50 index. The NIFTY IT sector has been a blue-chip repository for Indian investors with steady growth companies such as Tata Consultancy Services holding the 2nd highest market cap of Rs 12,66,031 crores and Infosys holding the 4th highest market cap of Rs 6,60,879 crore as reported by Business Insider.
Large institutions in India such as the Life Insurance Corporation of India (LIC), SBI Funds Management Pvt Ltd and mutual funds hold sizable shares in tech companies. While LIC owns 6.20% of Infosys and 3.69% of TCS, SBI Funds Management Pvt Ltd owns 3.72% of Infosys and 1.05% of TCS.
So there is interest that continues at home while there are global headwinds around BigTech.
Let’s take a look at the Public and Domestic Institutional Investor (DII) shareholding pattern of NIFTY IT:
|
Company |
DII |
Public |
5 Year Returns |
|
TCS Ltd. |
9.31% |
5.45% |
136.52% |
|
INFOSYS Ltd. |
32.70% |
15.91% |
175.73% |
|
HCLTECH Ltd. |
15.89% |
5.11% |
145.3% |
|
WIPRO Ltd. |
7.84% |
10.55% |
83.27% |
|
TECH MAHINDRA Ltd. |
23.91% |
12.95% |
74.59% |
|
LTIMINDTREE Ltd. |
11.6% |
10.5% |
6% |
|
MPHASIS Ltd. |
19.54% |
5.92% |
145.87% |
|
PERSISTENT Systems Ltd. |
22.04% |
26.4%
|
525.99% |
|
COFORGE Ltd. |
11.97% |
26.74% |
431.82% |
|
L&T Technology Services |
7.69% |
11.24% |
183.55% |
*All data except LTIMindtree from the Trade Brains portal.
Market Expert Ajay Srivastava as quoted by Times of India states, “One clear thing that came out was that the order book remains robust. The new acquisitions and large accounts have equally been robust, particularly for Infosys. I think they have a fair bit. What is also going to happen now that they have got the benefit of dollar depreciation, the rupee depreciation, almost 12% benefit has come from that, which might be missing next year.”
Sunil Damania, Chief Investment Officer, MarketsMojo has written in Economic Times that, “Indian IT firms have reported higher margins for Dec 2022 quarter compared to the Sept 2022 quarter indicating strong performance. Infosys has revised projections from 15-16 to 16-16.5%. TCS has publicly stated March 2023 quarter would be superior to their December 2022 quarter.”
“The trend is maintained due to the consensus that interest rates are likely to peak or have already peaked, which has encouraged investors to adopt more risk-on approaches. This should ensure that the IT sector is one of the top performers in 2023.”
Recession or no recession, Indian investors seem to be enjoying the growth their tech kitty is showing as Indian tech businesses continue to hold steady.
*Disclaimer: This content piece is for informational purposes only. Recommendations, suggestions, views, opinions, scores, research and investment tips expressed herein are not that of Vygr (Vygr Media Private Limited or its management and has been gathered from various third-party sources. Vygr/VMPL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. The content provided herein should not be relied upon or construed as an investment advice or recommendation or opinion. Please note that all markets have inherent risks. Furthermore, risk appetite is a personal aspect and varies from individual to individual. Vygr is not licensed to advice or recommend investments. Vygr advises users to check with certified (Licensed and Registered intermediaries) experts before taking any investment decision.
© Vygr Media Private Limited 2022. All Rights Reserved.
