InvestorQ : Will the impact on the Indian IT companies like Infosys, TCS, HCL Tech and Wipro same like they faced in 2008?
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Will the impact on the Indian IT companies like Infosys, TCS, HCL Tech and Wipro same like they faced in 2008?

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Sam Eswaran answered.
8 months ago
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That may not exactly be the case but there are surely some lessons that IT industry can take from the 2008 experience. For example, back then IT exports’ growth fell from 30% in FY08 to 16.8% in FY09 and 5.8% in FY10. However, the growth was pretty rapid after that. Post the 2011 period, stocks like TCS and Cognizant adapted better compared to Infosys and Wipro, which led to the huge valuation gap. However, in 2020, things could be different because the persistent lockdowns could result in greater in-sourcing by companies and a greater demand for competitive pricing. It is expected that, if more clients are impacted by lockdowns, Indian IT firms could see another round of price resets. In fact, Nomura has warned of significant cuts in IT spending budgets in 2020 while Kotak projects sequential revenue declines in the seasonally strong June and September quarters. The big worry could be that their biggest market, the US, has seen more than 100,000 afflicted by the COVID-19 and the real demand slump could come from there. That could be a concern for most of the IT companies as even Europe and UK are equally affected.

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