The COVID-19 pandemic has been a massive challenge for a lot of industries. But for one sector it has proven to be a shot in the arm – the technology space.
In India, the technology landscape is evolving and the larger players are re-inventing themselves. Midcap companies too are growing faster. Digital and internet consumer companies are also seeing a lot of traction.
But how will the sector perform going forward? Nilesh Shah of Envision Capital shared his views.
Higher valuations ahead?
According to Shah, technology stocks have been huge outperformers and several of the technology companies in India have been able to kind of win some large deals across the globe and bring about increased scalability in their business models.
Margins have expanded and therefore that has translated into even strong valuations, he said, adding yhat several companies have managed to win some very large deals.
Will the IT rally sustain?
Going forward, Shah believes the opportunity for technology companies is likely to sustain and even get bigger. It doesn’t seem to be just a short term phenomenon, but it is something which looks very enduring, he noted.
Preferred largecaps in the sector?
Tata Consultancy Services (TCS), Infosys, Wipro, and HCL Technologies – all these four companies have a very sound business strategy, said Shah.
"Each one of them has an edge somewhere in consulting, hi-tech, or in products. But the company that we like the most today, especially keeping in mind both growth prospects as well as the valuations, is HCL Technologies,” he added
For full interview, watch the video.
(Edited by : Pranati Deva)
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