IT sector can perform better in second half of FY25

Information technology is poised to do well on the revenue and margin front with a strong order book. The sector, which has been under pressure for long, can bottom out in the second half of the current financial year, according to Vaibhav Sanghavi, chief executive officer of ASK Hedge Solutions.

The discretionary spending was getting under pressure, but on the overall deal-booking, “we are very encouraged on how things are panning out”, he said in an interview with NDTV Profit’s Niraj Shah. “As per expectation, there is a possibility of scope for improvement coming in the second half of FY25.”

On the margin front, Sanghavi said that generative artificial intelligence was bringing in some efficiency as well that people were not expecting. “Overall, on both revenue and margin, we may be bottoming out in the next quarter or two, with a better performance second half of FY25.”

Investors can take a position from a medium to long-term perspective to start getting into the IT space, he said.

Volatility To Persist Due To Geopolitical Tensions
Volatility in the markets is going to stay a little elevated from both global and local perspectives, according to Sanghavi.

The hard-landing growth that was expected has not been the case, but the geopolitical tensions will jeopardise the outlook, he said. “These conflicts may affect some change but that is something we will have to wait. If that (Iran-Israel) continues, then there would be a sizable impact on those variables.”

Volatility is there to stay for the next three to four months. Investors can stay invested if they have the appetite to brace that volatility, he said.

Sanghavi underscored that there are a lot of contradictions in the global market. In the US, the growth and the inflation print is strong, while China is fighting deflation and probably lower growth. Meanwhile, Europe is probably looking to push for rate cuts ahead of the Federal Reserve, Sanghavi said.

Investors must have a medium to long-term play in the renewables and sectors that will see structural reforms, he said, while talking about the Lok Sabha election. NDTV Profit