Information Technology - Cyclical or Secular (Newgen vs Intellect Design vs Persistent)
According to Gartner estimates, IT spending in India is estimated to reach US$ 93 billion in 2021 (7.3% YoY growth) and further increase to US$ 98.5 billion in 2022. As of FY21, the IT industry employed 4.5 million people. This push towards cloud services has boosted hyper-scale data center investments, with global investments estimated to exceed ~US$ 200 billion annually by 2025. Broad story: Dotcom bubble in 2000-Stretched valuations and overhyped earnings. 2002-Packaged Software—IBM and SAP growth—lead to rise of TCS, Infy, Wipro, HCL 2010-Engineering Services—Tata Elxi, LTTS and others 2015 onwards Digitalization = Shifting from legacy services (2%Cagr) to digital services(Growing 21% CAGR) 2018 onwards : SaaS(Software as a Service)—Capex one time becomes OPEX—Retained earnings + Pricing power (as less competition) Value Chain Broad overview of popular companies : Happiest Minds Insights=Software as a Service which is OPEX for customer not CAPEX putting up certainty ...