The IT sector has enjoyed huge growth over the past decades, however, the past year saw a dip in the industry with the looming possibility of recession across economies. This year started with the news of many layoffs across industries and the tech sector was among the worst hit. The sector is one of the top sectors in the country in terms of employers and revenue generators for the economy. Here are the details of the IT sector of the country and top stocks in terms of market capitalisation.
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The digital infrastructure of the country is seeing a tremendous increase to support and boost the growing demand in the country for technology and the increase of AI in different fields. The government along with the private sector is continuously investing in the IT sector and emerging technologies. The domestic revenues from the sector are growing 13% from FY 22 in INR terms and there is a huge increase in digital spending among the masses of the country.
India has become a global leader in deeptech innovation capabilities and research and development (R&D) in recent years. The country is committed to driving future growth and innovation for global enterprises. One of the key factors contributing to this success is the presence of global capability centers (GCCs) in India. Currently, around 40% of global GCCs are located in the country, which highlights the significant opportunity for India to scale up its capabilities further. In the past year, India has added 65 new GCCs, bringing the total number to over 1,570. This demonstrates the country's potential to attract more GCCs and further cement its position as a destination of choice for engineering R&D.
Through continuous efforts of the government to provide a level playing field for the Indian exporters, the service export revenue from this sector is expected to reach US$ 194 billion in the current year registering a growth of approximately 9.4% from the previous year. The government has also encouraged FDI (Foreign Direct Investment) by permitting 100% FDI in this sector. Furthermore, the government also promotes R&D in this sector through various tax incentives like the deduction of up to 150% of the expenditure incurred on in-house R&D available under the Income Tax Act and a reduction in the overall taxation level in the electronic hardware. there are many existing government schemes that aid entrepreneurs in this sector along with new schemes like the Support International Patent Protection in Electronics & IT (SIP-EIT) and Multiplier Grants Scheme (MGS).
The IT sector in India is one of the strongest pillars of the economy and has given a significant contribution to pushing it to become the 5th largest economy in the world. According to a survey by Amazon Web Services conducted in 2021, India is expected to have nine times more digitally skilled workers by 2025. IT spending in India is also expected to increase to US$110.3 billion in 2023 from an estimated US$81.89 billion in 2021. In November 2021, Mr. Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, commended the Indian IT sector for its competitive strength and acknowledged the potential of service exports from India to reach US$1 trillion by 2030, without any government interference.
The trailing returns for TCS are tabled below.
The trailing returns for Infosys are tabled below.
The trailing returns for HCL Technologies are tabled below.
The trailing returns for Wipro Limited are tabled below.
L&T is one of the largest names in India and abroad and is engaged in the business of providing an extensive range of IT services like application development, maintenance and outsourcing, enterprise solutions, infrastructure management services, testing, digital solutions, and platform-based solutions to the clients in diverse industries. The key details of the company are tabled below.
The trailing returns for LTI Mindtree Limited are tabled below.
Marisha Bhatt is a financial content writer @TrueData.
She writes with the sole aim of simplifying complex financial concepts and jargon while attempting to clarify technical and fundamental analysis concepts of the stock markets. The ultimate goal is to spread vital knowledge and benefit the maximum audience. Her Chartered Accountant background acts as the knowledge base to help clarify crucial concepts and create a sound investment portfolio.
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