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India Equity Research Reports, IPO and Stock News
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Indian IT services -------------------------------------------------------- Maintain MARKET WEIGHT
Well positioned in a smart era
● In a new report, Serving the smart era, the CS Technology Team
led by Kulbinder Garcha, projects global IT spend to grow at 4%
CAGR through to 2015. This would be driven by megatrends such
as virtualisation, move towards cloud computing and explosive
growth in smart devices, including smartphones and tablets.
● IT services will be one of the faster growing segments within
global tech and is expected to log a 5% CAGR over the same
period driven by the increasing penetration of IT services.
● We observe that Indian IT vendors have steadily increased their
market share in new contracts awarded – they accounted for 20%
(by value) of TCVs awarded upto 3Q 2010, despite having only a
collective 3% share of the market. We believe that this trend
should continue going forward.
● We remain bullish on the long-term prospects of the Indian IT
services industry. Infosys and TCS could be best placed from a
longer-term perspective given their diversified portfolio, strong
execution and excellent management teams.
We present takeaways from new report titled Serving the smart era by
the CS Technology Team led by Kulbinder Garcha, dated 16 March
2011 on the long-term prospects of the global IT industry.
Expect robust growth in global IT spend
The CS Technology Team believes the megatrends of virtualisation,
move towards cloud computing and explosive growth in smart devices,
including smartphones and tablets, should drive continued growth in
global IT spend and forecasts a 4% CAGR through to 2015.
Global IT services market to log a 5% CAGR through 2015
According to our technology team, the IT services sector is being
underconsumed by the global economy. For example, IT services as a
percentage of global GDP is at 1.3%, but in 2000-09, it rose from
1.07% to 1.32% and hit a high water mark of 1.37% in 2008. If this
trend resumes, then the CAGR in the $780 bn services market would
run at 5.8% per annum. Our technology team forecasts a slightly
lower annual growth of 4.9% during the same time period.
Indian IT well-positioned to grab a disproportionate share
We observe that Indian IT vendors are gathering market share
momentum, and they accounted for 20% (by value) of TCVs awarded
upto 3Q 2010, despite having only a collective 3% share of the market.
They are helped by the twin trends of reducing size/duration of deals
and increasing the number of restructured contracts.
The global shift to smaller/lower duration deals has helped Indian IT
vendors since they are much better positioned compared to global
peers in a
US$25-50 mn now account for 47% of volumes and 12% of TCVs, the
highest level in a decade.
Infosys and TCS are the best placed
We remain bullish on the long-term prospects of the Indian IT services
industry. Infosys and TCS could be best placed from longer term
perspective given their diversified portfolios, strong execution and an
excellent management teams.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian IT services -------------------------------------------------------- Maintain MARKET WEIGHT
Well positioned in a smart era
● In a new report, Serving the smart era, the CS Technology Team
led by Kulbinder Garcha, projects global IT spend to grow at 4%
CAGR through to 2015. This would be driven by megatrends such
as virtualisation, move towards cloud computing and explosive
growth in smart devices, including smartphones and tablets.
● IT services will be one of the faster growing segments within
global tech and is expected to log a 5% CAGR over the same
period driven by the increasing penetration of IT services.
● We observe that Indian IT vendors have steadily increased their
market share in new contracts awarded – they accounted for 20%
(by value) of TCVs awarded upto 3Q 2010, despite having only a
collective 3% share of the market. We believe that this trend
should continue going forward.
● We remain bullish on the long-term prospects of the Indian IT
services industry. Infosys and TCS could be best placed from a
longer-term perspective given their diversified portfolio, strong
execution and excellent management teams.
We present takeaways from new report titled Serving the smart era by
the CS Technology Team led by Kulbinder Garcha, dated 16 March
2011 on the long-term prospects of the global IT industry.
Expect robust growth in global IT spend
The CS Technology Team believes the megatrends of virtualisation,
move towards cloud computing and explosive growth in smart devices,
including smartphones and tablets, should drive continued growth in
global IT spend and forecasts a 4% CAGR through to 2015.
Global IT services market to log a 5% CAGR through 2015
According to our technology team, the IT services sector is being
underconsumed by the global economy. For example, IT services as a
percentage of global GDP is at 1.3%, but in 2000-09, it rose from
1.07% to 1.32% and hit a high water mark of 1.37% in 2008. If this
trend resumes, then the CAGR in the $780 bn services market would
run at 5.8% per annum. Our technology team forecasts a slightly
lower annual growth of 4.9% during the same time period.
Indian IT well-positioned to grab a disproportionate share
We observe that Indian IT vendors are gathering market share
momentum, and they accounted for 20% (by value) of TCVs awarded
upto 3Q 2010, despite having only a collective 3% share of the market.
They are helped by the twin trends of reducing size/duration of deals
and increasing the number of restructured contracts.
The global shift to smaller/lower duration deals has helped Indian IT
vendors since they are much better positioned compared to global
peers in a
US$25-50 mn now account for 47% of volumes and 12% of TCVs, the
highest level in a decade.
Infosys and TCS are the best placed
We remain bullish on the long-term prospects of the Indian IT services
industry. Infosys and TCS could be best placed from longer term
perspective given their diversified portfolios, strong execution and an
excellent management teams.
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