Vibhor Singhal explains why Nuvama is so positive on IT stocks
Vibhor Singhal, Director, Nuvama, says whenever a new tech trend pops up, industry experts seem to predict the end of Indian IT, almost like they're writing its eulogy. But time and again, these companies manage to rise from the ashes, leveraging these disruptions for growth. Gen AI will likely follow the same path. The next couple of years will be a testing ground filled with proof of concepts and smaller initiatives. However, as technology evolves and becomes more mainstream, and as businesses get a grip on its advantages and drawbacks, Indian IT firms will rebound and reclaim their market presence.
The basic sectoral stance that you have on IT is doubling down on a positive stance. What is making you so positive?
Vibhor Singhal: Our stance on the IT sector has been positive for the past two years. We have maintained that the demand environment remains quite strong, which is visible in the deal flow that we have seen over the past two years, despite the macro headwinds the sector has witnessed. What was missing in the sector was the deal flow to revenue conversion, which of course had multiple points, two of them majorly being the new deals being awarded were delayed in execution and the older deals that were there in the pipeline of the companies, the discretionary part of that was being put on hold.
Both these things were an outcome of the overall uncertainty in the macro environment in the US. So, from a near to medium-term perspective, we believe that as we move closer to the interest rate cut scenario in
