Digitisation has turned out to be a highly rewarding theme for investors across the globe over the past couple of years. The real and virtual worlds have intersected and blended. Everything is online, available at our fingertips.
But do you know who spearheads these initiatives? Well, it's none other than IT stocks. Indian IT companies have remained at the forefront of a boom in tech spending.
India has a low-cost advantage when it comes to IT services. IT services in India costs a fraction of what it costs in the US, which makes India a preferred destination for IT sourcing.
As things stand now, Indian companies are focusing on newer models such as platform-based services and creation of intellectual property. Adding to this is the Indian government emphasizing on better technology enabled delivery mechanisms for a multitude of government projects.
As revenue for the IT sector is mainly export oriented, it is largely impacted by the depreciation of the rupee versus the US dollar. A depreciating rupee is beneficial for the sector and vice versa and IT companies have various hedging policies that help them benefit from it. Therefore, a good time to invest in the sector would be when the rupee is depreciating.
For more details, check out our IT sector report.
You can also check out Equitymaster's powerful stock screener to find the top IT companies in India.
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