2022 IT Industry Review: Part 3 What’s in The Books For The Indian IT Industry in 2023 – A Quick Analysis

>> Read the Part 2 Here

The previous year witnessed a fall in the stocks of most prominent IT companies, and a global economic recession has clearly set in. There was also a sharp decline in tech stocks, followed by layoffs. But, at the same time, there was overall growth in the industry.

So, will 2023 also be a mixed bag, or will it be a complete fall for Indian IT? Let’s take a look.

Stock Valuations in Question

One of the major debate points amongst industry experts is the valuation of major tech stocks. While these stocks have plummeted, many experts claim that the revaluation was necessary in order to bring equity to the market. All major players, besides Infosys, have had their stock values fall in the last quarter.

2023 will clearly be the year where investors will have to pay close attention to stock valuations, even for the stocks with the highest values. Unlike the previous years, expecting a growth rate as high as 15% will not be possible. The depreciation of the rupee as compared to the dollar value, which will most likely continue into the next quarter, will also affect the major stock decisions.

While many of these markers may seem apparently negative, the long-term growth of the Indian IT industry is still viable. Amidst the layoffs and the valuation fall, many positive statistics need to be followed. The bigger stocks are still up for sale across the board, and investing in them will not lead to losses in the foreseeable future.

IT budget to increase in 2023

As per reports, there will be a 2.6% increment in overall IT spending this year, with a total valuation of over $110 billion. Last year, it fell by 1.9%, signaling growth for the ongoing year.

But, certain segments will still witness a fall. Data centers, in particular, will be hit the most, as shifting to cloud systems is the popular option. While the device expenditure is also expected to fall, it will still comprise a whopping 40% of the entire budget.

Spending on cloud systems will grow the most, state experts. But, this will also depend on factors such as the overall maturity of the sector and the constant upskilling process. The ongoing recession will also be a factor that will decide how much growth the industry can afford overall.

Summing Up

While the year has just begun, major changes are already in process. Whether you are an investor or a part of the industry, it is important to note the constant changes that keep experts guessing about the future.

But rest assured, the investments being made into the industry will not turn belly up; however, there will likely not be any major profits made before the next 2 years.

>> Read the Part 1 Here