“It’s a usual life cycle of any industry when it becomes too big, it’s very difficult for Indian IT industry to grow way faster than the global industry. The global industry has always grown at low single digits, at best, mid-single digits and that is where we would expect Indian IT services to converge too gradually and it’s been converging,” he said.
Overall, he described the IT services industry as ex-growth and indicated that revenue growth pressures are likely to persist for an extended period, making the sector less attractive for broad investment.Read Here | India back on investors’ radar as valuations ease: Amundi’s Florian NitoWhile the IT sector faces limitations, Sharma sees significant promise in India’s digital ecosystem, which he says is still in its early stages compared to markets like the US and China. “India’s digital landscape presents a multi-decade opportunity. Companies spanning direct-to-consumer, B2B, and B2B2C models are emerging across multiple sectors,” he explained.
Sharma emphasised that digital is a diversified investment theme, now permeating industries ranging from retail and food tech to financial services, including lending, payments, wallets, and insurance. He also highlighted opportunities in logistics, navigation, and travel.
“We are observing many smaller companies today that have the potential to become major players in the future. Essentially, wherever digital can add value, it is doing so,” he said.
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