IT - Software Stocks

The IT software industry encompasses the design, development, maintenance, and sales of software applications. It’s a massive global force, powering everything from business operations and mobile apps to cutting-edge AI and cloud computing.

India’s information technology or IT industry’s software sector shines as a leading export sector. Its revenue reached a staggering $245 billion in FY 2023, with technology exports alone pulling in $194 billion. India has become a prime location for establishing Global Capability Centres (GCCs), attracting over 1,580 such centres with a combined workforce exceeding 1.66 million skilled professionals. This trend is further bolstered by the anticipated creation of over 45 new data centres by 2025, fueled by investments of $10 billion since 2020. These advancements position India as a hub for digital infrastructure and expertise.

Indian Software-as-a-Service (SaaS) companies are experiencing a surge, doubling their share in the global market and producing 59 unicorns and potential unicorns. Notably, internet connections have skyrocketed, increasing from 25.15 crore in 2014 to a remarkable 83.69 crore in 2022.

The IT Software sector encompasses software development, cloud computing, and data science, driving India’s export economy. With a robust revenue of $245 billion in FY 2023, the sector anticipates a 9.4% annual growth. Key considerations before investment include financial health, client industries, and competitive landscape analysis. Notable players like Tata Consultancy Services and Infosys offer investment opportunities. NINtec Systems Ltd exhibits a remarkable 5-year CAGR of nearly 128.54% as of January 31, 2024. Angel One provides a seamless platform for investing in IT Software stocks, reflecting India’s position as a global IT hub.

The IT Software sector in India is not without challenges. There is a high attrition rate of around 20% until FY 2023, which is expected to drop in FY 2024. There is also the challenge of AI or artificial intelligence adoption, which makes the market more open to disruption by more AI-capable companies.

However, given the post-COVID drive for digital transformation in India and the increase in the market for mobile and laptop devices, the IT Software industry’s growth is not going away any time soon. Moreover, this export segment is poised for continued growth, expecting a 9.4% annual increase.

1. Check for Financial Fitness: Check if the financial health of individual companies is in order or not. Check for profitability, cash flow, and capital efficiency to assess their operational strength.
2. Follow the Client Industries: Major drivers for the sector could include trends in growth in IT Software-heavy sectors like IT Consultancy, BFSI, e-commerce, etc. Trends in these sectors will help you track trends in IT Software.
3. Competitive Landscape: Map the major players in the Indian IT Software market and their market shares.

Investing in IT Software stocks via Angel One is easy. Simply follow these steps:

1. Log in to your Angel One account.
2. Click on the search icon and look for your desired IT Software stock.
3. Now, place your buy order. Simply click on the ‘Buy’ button, enter your desired quantity, and select the order type.
4. To complete your transaction, click on the ‘Buy’ button.

If you don’t have a Demat account with Angel One, you can open one for free online within minutes.