Indian information technology (IT) services companies have benefited hugely from the adoption of digital technology around the world. There are compelling opportunities in this sector, where corporate governance is generally strong and capital efficiency is high. On average, leading IT services companies have a return on capital employed (ROCE) of 50% (excluding cash), and the conversion factor of accounting earnings to free cash flow is around 90%.
Indian IT services occupies a dominant position in the technology services sector, providing cost-effective and scalable solutions for enterprises across the world. India’s IT exports are worth over $160bn per year (around 13% of total global IT spend), and have grown at an annual rate of 20% over the last 20 years.
Beating the tech-refresh cycle
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