Best midcap IT stock: Tata Elxsi vs KPIT Technologies
companies embrace digital trends. ER&D is the process of turning ideas into tangible products, services, and processes. Now, this segment is evolving from just design and deployment to include maintenance, regular updates, and continuous data analytics.
This has extended the product life cycle significantly, offering monetization opportunities for product companies. It has also expanded business prospects for ER&D firms. In this rapidly evolving landscape, India assumes a pivotal role, positioned at the forefront of technological innovation and disruption.
It emerges as a prominent global hub for ER&D, leveraging its abundant talent pool and competitive cost structure to gain a significant foothold in the industry. According to NASSCOM, revenue from ER&D in India is projected to reach US$ 41 billion (bn) by 2023. This will be driven by a steady increase in digital ER&D spending.
This trend highlights the scope for growth in this sector in the years to come. Bearing this in mind, we compare two players in this space - KPIT Tech and Tata Elxsi. Tata Elxsi is amongst the world’s leading providers of design & tech services across industries.
It’s operations can be classified into two business divisions, i.e., software development and services and systems integration and support. The software development and services (accounting for 87% of total revenues in the financial year 2023) division is the most significant business component, comprising 3 focus verticals: transportation (37.4%), media & communications (36.1%), and healthcare (13.5%). The system integration and support services (13% of total revenue) are an important component of the company’s end-to-end product life cycle services – right from conceptualisation to
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