InvestorQ : How is it that Indian IT companies have come out unscathed from the COVID crisis and they have emerged stronger?
Juvina Maggie made post

How is it that Indian IT companies have come out unscathed from the COVID crisis and they have emerged stronger?

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Deepa Salunkhe answered.
7 months ago
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That is an interesting question and to answer that question that question, you need to understand how smartly these Indian IT companies managed to adapt their business models to changing conditions. For example, all IT companies have rapidly made the shift from traditional BFSI focus to focus cloud, analytics, mobility and social for execution of IT projects for large clients.

If you look at the large IT companies today, nearly 35%-40% of revenues of all the top IT companies come from digital businesses. There was another scare when H1-B restrictions were initiated by Donald Trump in 2016. This raised question marks over the traditional on-shore model. Indian IT adapted its model rapidly to focus on off-shoring of projects and getting projects executed in the United States with local manpower there.

If I were to summarize the story of IT industry in India, it has consistently been ahead of the curve. Over the years, these IT players have been very flexible and also adaptable. From the end of tax concessions in 2000 or the post-Y2K regime, IT industry did it rapidly. Similarly, reducing focus on BFSI and shifting to digital and off-shoring also happened with all the IT companies almost seamlessly. That is the benefit that these IT boys are reaping now.

In short, it needs no reiteration that even during COVID, IT companies adapted to the changed environment much better than other industries in India. That ability to adapt was highlighted during the height of the pandemic in 2020. IT majors adapted easily to distributed model and the work-from-home model. They learnt to operate on tighter IT budgets and tweaked their balance sheets accordingly. Q3 results are just proof of that.

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