Smartkarma Webinar | Indian IT Services: Picks and Pans

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Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

India It services / Thematic (Sector/Industry)

<ul>
<li>Following the purple patch of growth experienced in the wake of accelerated digitization following the COVID-19 pandemic, revenue growth has continued to slow down during FY2023, for the sector.</li>
<li>Operating margin deterioration has continued, despite significant FX tailwinds, largely due to the inflationary impact of increased employee attrition rates, to record levels, across the industry.</li>
<li>Given weakening near-term revenue growth prospects and valuation levels barely touching fair value levels, we remain cautious on the sector.</li>
</ul>


Following the purple patch of growth experienced in the wake of accelerated digitization following the COVID-19 pandemic, revenue growth has continued to slow down during FY2023, for the sector.
Operating margin deterioration has continued, despite significant FX tailwinds, largely due to the inflationary impact of increased employee attrition rates, to record levels, across the industry.
Given weakening near-term revenue growth prospects and valuation levels barely touching fair value levels, we remain cautious on the sector.


Indian IT Services: Weakening Revenue Dynamics, and Above-Fair Valuation Levels, Keep Us Side-Lined