Select Your Language

Information Technology: The right click

Revenue growth back on track, opportunities in under-penetrated verticals, service lines, geographies to drive growth

Large under-penetrated service lines (IMS, Consulting, OPD) offer growth opportunities

Healthcare, Energy & Utilities are relatively nascent verticals for offshoring with potential to be growth drivers for the sector.

Continental Europe, Japan, India the next geographies to opt for offshoring/outsourcing in a big way

Client mining potential, impending deal renegotiations additional triggers

Despite challenged revenue growth during the downturn, Indian IT companies preserved their profitability by focusing on efficiency and cost rationalization. We are bullish about most large-cap IT companies as long-term trends towards offshoring are positive. We prefer Infosys and HCL Tech among large caps. To ward off market share losses to Indian offshorers, we expect aggressive MNC offshoring to continue as a trend, and see Mphasis as a beneficiary of the trend. Our target price for Infosys represents an upside of 19%. Infosys remains our top pick across large cap IT.