Once the government-issued lockdowns began in March, most industries feared the worst. That the pandemic would stretch out and its effects would cause irreparable damage to businesses, up to a point where most would not only wonder how to recover but if they would be able to survive.
While many believed that the IT-sphere would prove to be resilient, it still faced the impact of the disruption caused by the current crisis. In the summer, most analysts predicted that the first quarter reports would show that top companies’ revenues have dropped by 5-10%. They were right, as Tata Consultancy announced a 13.8% fall in operational revenues for Q1, and Wipro’s total revenues fell by 5.3%. Tech Mahindra did slightly better, registering only a 4% drop in overall revenues for the first quarter of 2020.
While an unwanted situation, these percentages are incomparable to the figures that other Indian industries reported. The trade and hospitality industry saw a 47% drop in revenues, construction marked a 50.3% fall, and manufacturing marked a 39.3% decline. Many of these figures drastically improved in Q2, but India’s GDP shrunk by 23.9% in Q1 and is still recovering slower than other nations.
IT experts believe that the current situation leaves the door open for growth opportunities in the data, digital banking, and cloud services sectors when the pandemic runs its course. Healthcare, communications, hi-tech, life sciences, and healthcare have also seen slightly improved business opportunities, and these sectors should grow in the next few years.
Online Casinos Are an IT Sector That’s Booming
At the start of the year, technology spending drastically decreased because of stay-at-home measures and health-related paranoia. However, spending on digital entertainment sky-rocketed. Streaming services noted an increase in new user sign-ups, and there was a massive spike in Indian casino players online. It is illegal for Indian companies to provide gaming services to residents. However, there is nothing legally stopping Indian players from enjoying games of chance at offshore sites. The number of people doing so now is higher than ever. Thus, this is one IT sector that has not only managed to remain unblemished but has prospered.
Due to the player base rising substantially in such a short period, analysts had to adjust their industry projections. Going by a new Grand View Research report, the market has gained such traction in the first half of 2020 that it will grow by an annual rate of 11.5% until 2027, when it will almost double in size, reaching over $127 billion. The Asian market should register the highest growth rate. Increased smartphone adoption and the continent’s young population will be the two main contributing factors. Anyone interested in playing games of chance for money or betting on sports can now do so from home, and more and more people are taking advantage of the opportunity.
Indian IT Firms on Acquisitions Sprees Amidst Pandemic
According to Tracxn, a company tracking platform, tech giants such as Apple, Google, Facebook, and Amazon have acquired more companies this year, as compared to 2019. Apple has bought out eleven companies, while Microsoft and Facebook each brought nine new members into their folds. Many believe that this is happening because of the rising demand for digital services in all markets. The pandemic has caused the valuations of smaller tech startups to erode. Thus letting tech giants close lucrative deals quickly. Internet-driven consumption in consumer and enterprise markets has led to tech stocks over-performing this year.
In India, this trend is also visible. Wipro and Infosys have both acquired two firms, and HCL tech managed to snag SON technology in May. Accenture and Cognizant, two global IT companies with a significant presence in India, have also made fifteen acquisitions this year. The majority of the bought-out companies operate in the cloud and cybersecurity sectors. Many consider them to be strategic acquisitions that lay the groundwork for the future. For years, technology capabilities like cloud and big data analytics have been mention as crucial components for Indian tech companies’ expansion into other markets, such as those in Europe and North America.