Market Moves: Ashi Anand’s take on Indian IT and auto sectors
ET Now: The Indian IT pack has seen a lot of changes following Accenture's latest numbers, which showed a slight miss. Despite this, some brokerage notes suggest this could be a positive for Indian IT, although recovery might be gradual. What do you make of these numbers, and what impact could they have on the external-facing IT sector? If you were to play this sector, would you favor large caps over mid caps, or what is your strategy for the Indian IT space?
Ashi Anand: When looking at IT, we have seen a clear trend over the last two or three quarters. Deal wins across IT companies remain strong, but revenue growth and guidance have been weaker than expected, primarily due to weaker discretionary spending.
Unlock Leadership Excellence with a Range of CXO Courses
Offering CollegeCourseWebsiteIndian School of BusinessISB Chief Digital OfficerVisitIIM LucknowChief Executive Officer ProgrammeVisitIndian School of BusinessISB Chief Technology OfficerVisit
Until we see a broader recovery in the US or global economy—potentially spurred by a rate cut cycle towards the end of the year that could bring optimism and business revival—discretionary demand will likely remain weak. This is reflected in Accenture’s numbers, and we expect to see similar trends in the upcoming quarters.
The IT sector may struggle until discretionary demand returns. However, once signs of a global economic recovery appear and businesses are more willing to spend on IT, this sector, which has underperformed significantly in recent years, could
