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Stay Away from IT Servicing Firms - TCS, Infosys, HCL, Polaris and Other's

Once the darling of the Indian equity market and still most weighted one in Sensex , the investor should be alert for next 24 months. Most of the contract which is running for the past one decade or less is up for renewal. It is of very high probability that major international player may act as spoiler. Many countries came out with law to hire local resources instead of brining outsourced resources. Even though most of the Indian IT company opened their development center in most of the countries but it impacted their margin very dearly.

On the domestic front, most of the Indian IT company is struggling as the IT upgrade is taking off slowly by big organization as all are waiting for the economy to get stable. The IT organizations are fortunate that USA economy is doing well but due to the upcoming election, most of the companies from USA may park their decision in order to avoid any unwarranted headline because of outsourcing.

Most of the retail Investor always gets tempted to invest in Indian IT sector as they feel that stock split is going to make them rich but the current valuation of each companies are sky high. Given the revenue and profit growth potential which looks dim in coming quarter, it is advisable to get out of the IT and park your hard earned money in other sectors. One must remember that midcap is  going to pick up first before large cap get the pop up

Disclaimer - Consult your Financial advisor before investing
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About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
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