Mid-Size Indian IT Companies to Outshine Larger Peers Despite US Visa Uncertainty
Mid-size Indian information technology companies may do better than their larger peers even under macro uncertainty, according to Vikas Khemani, founder and chief investment officer at Carnelian Asset Management. In an interview with NDTV Profit, Khemani expressed his optimism about the growth prospects of mid-size IT companies in India.
Why Mid-Size IT Companies Will Do Well
Khemani attributed the potential outperformance of mid-size IT companies to their ability to adapt quickly to changing technological trends. “Large IT companies are going through the process of building AI capabilities. Order books have remained decent. Given that they are large, growth will be limited. Mid-size IT companies will do well,” he said. Khemani also pointed out that every time there is a technological transformation, new companies tend to do well. He cited the example of companies like LTIMindtree, Persistent, and HCLTech, which went from being minnows to 15 and 20x in their journey post the global financial crisis.
IT Services to Grow Due to AI-Related Technologies
Khemani also stated that IT services at a global level will only grow because of AI-related technologies. He dismissed suggestions that India has missed out on AI, saying the country will mint many world-leading tech companies in the next ten years. “Indian IT services have served the economy very well. We have large forex reserves thanks to them and a lot of employment was generated. A lot of companies are being incubated, which will take lead in AI,” he said.
US Visa Uncertainty and Its Impact on Indian IT Companies
The US has imposed a $100,000 one-time fee on fresh H-1B visas, a vast majority of which have historically gone to high-skilled Indian IT workers. However, Khemani does not see this as a major hurdle for Indian IT companies. He believes that the growth of mid-size IT companies will be driven by their ability to adapt to changing technological trends and their focus on AI-related technologies.
Indian Stock Market to Recover in the Next Six to Eight Months
Khemani also expressed his optimism about the Indian stock market, saying it will recover and pull ahead in the next six to eight months. He cited direct and indirect tax cuts, lower borrowing costs, and higher liquidity as reasons for his optimistic outlook. Indian stock market trends are expected to be driven by the growth of mid-size IT companies and the overall economic recovery.
Conclusion
In conclusion, mid-size Indian IT companies are expected to outshine their larger peers despite the uncertainty surrounding US visas. The growth of these companies will be driven by their ability to adapt to changing technological trends and their focus on AI-related technologies. As the Indian stock market recovers in the next six to eight months, mid-size IT companies are likely to be major beneficiaries. Investing in India can be a lucrative opportunity for investors who are looking to tap into the growth potential of mid-size IT companies.
