India is a leading sourcing destination across the world accounting for approximately 55% market share of the $185-190 billion global services sourcing business. Indian IT & ITeS companies have set up over 1,000 global delivery centres in about 80 countries across the world. India has become the digital capabilities hub of the world with around 75% of global digital talent present in the country. India’s IT & ITeS industry grew to $181 billion in 2018-19 with exports from the industry increasing to $137 billion for FY19 while domestic revenues (including hardware) advancing to $44 billion. According to analysts, the spending on Information Technology in India is expected to grow over 9% to reach $100 billion by 2020. Revenue from digital segment is expected to comprise 38% of the forecasted $350 billion industry revenue by 2025. Indian IT’s core competencies and strengths have attracted significant investments from major countries. The computer software and hardware sector in India attracted cumulative Foreign Direct Investment (FDI) inflows worth $37.23 billion between April 2000 and March 2019 and ranks second in inflow of FDI, as per data released by the Department for Promotion of Industry and Internal Trade. The government has also taken major initiatives to promote the IT and ITeS sector in India and has identified the Information Technology as one of 12 champion service sectors. In the Interim Budget 2019-20, the Government of India had announced plans to launch a national programme on Artificial Intelligence (AI) and setting up of a National AI portal. India is the topmost offshoring destination for IT companies across the world having proven its capabilities in delivering both on-shore and off-shore services to global clients. But now emerging technologies offer an entire new gamut of opportunities for top IT firms in the country. The industry is expected to grow to $350 billion by 2025 and BPM is expected to account for $50-55 billion out of the total revenue. NIIT technologies Ltd has been in the shadows among the three industry big boys such as TCS , Infosys and Wipro but a solid stable company in the business posting excellent results year after year. It is a leading global IT solution organisation with deep specialisation in verticals like banking and financial services , insurance and travel and transportation. With excellent domain specialisation, NIIT Technologies leverages it all together with differentiated capabilities in automation, Cloud , data and analytics and digital . The company posted good Q2 FY20 results with net sales at Rs 544 crores up 12% from Rs 485 crores as of last fiscal and net profit at Rs 58 crores up 10% from Rs 52 crores for the same period as of last year. The NIIT Technologies stock currently hovering around Rs 1,548 trades at a PE ratio of around 22 for FY20 and most analysts are bullish on the stock for FY21 for it to appreciate by over 20% in the next twelve months horizon .
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.