Hexaware Unlisted Shares Essentials

Introduction: 

• The IT service market combines the BPO service market, the SAAS service market, and the infrastructure services market.
• The BPO services market is defined as the revenues from services related to the following segments: customer relationship management (CRM), finance and accounting, human resources, knowledge process outsourcing, and procurement and supply chain.
• The SAAS services market is defined as the revenues from services related to the following segments: application development, application management, and performance monitoring.
• The infrastructure services market is defined as the revenues from services related to the following segments: cloud computing, data center & hosting services, IT management, security, and storage.
  
• The Indian services sector is paramount for the country’s economy with its exponential contribution to the nation's and state's incomes, trade flows, FDI inflows, and employment.
• The industry covers a large area of activity all over the country like trade, hotels, restaurants, transport, telecommunication, IT, financing, insurance, real estate, business services, community, social & personal services and associated with construction, etc. 
• IT industry plays a key role by positioning the country as a preferred investment destination for global investors. The Indian IT industry contributes to around 8% of the country's GDP and is the most significant contributor to total services exports.

Market size: 

• According to Marketline, the Indian IT services industry grew by 9.5% in 2021 to reach a value of $30.1 billion compared to $ 27.5 Billion in 2020.  
• According to Marketline, the global cloud computing industry grew by 12.7% in 2020 to reach a value of $240,698.7 million. The compound annual growth rate of the industry in the period 2016–20 was 24.1%
•  The revenues from the domestic market grew during FY21, supported by various government initiatives such as digital India, start-up India, smart cities, and digital payments.
• Out of the total export revenues generated by the IT industry, the IT services segment contributes 50-55%, while BPM contributes nearly 25%. Software products & Engineering services contribute the remaining share.
• Infrastructure services is the largest segment of the IT services industry in India, accounting for 58.8% of the industry's total value
  
• The export revenue for the IT services industry grew by a modest 2.6% YoY in FY21.
• Rise in demand for collaborative applications, application platforms, security software, system & service management software, and content workflow & management applications has led to a 2% growth in the software products segment to $3 billion.
• India accounts for 8.9% of the Asia-Pacific IT services industry value. 
  

Growth:

• The IT services industry is evolving from offering services such as outsourcing, which improves productivity and efficiency, to providing value-added services such as analytics consulting. This has increased rivalry as players seek to capture a share of these higher-margin sectors.
• The sector ranked 2nd in FDI inflows per the data released by the Department for Promotion of Industry and Internal Trade (DPIIT).
  

• According to Marketline, the compound annual growth rate of the industry in the period 2017–21 was 8.8%

• In another report according to Marketline, the compound annual growth rate of the industry in the period 2016–20 was 24.1%

Key Trends

• The IT industry is the most dynamic industry of all, and it has a significant shift in the base technology used every 8 to 10 years.
• The key trends in the market include new advancements for a better future like the Internet of Things, Blockchain, Machine Learning, Artificial Intelligence, Augmented Reality, Data advancement like 5G, and so on
• Key players in these advancements in India include Bharti Airtel Ltd, Happiest Minds Technologies Ltd, Larsen & Turbo Infotech Ltd, HCL Technologies Ltd, and Tata Elxsi Ltd
• These technological advancements have given rise to a pool of opportunities like VR/AR gaming, Metaverse, web3, robotics, web-tech, food-tech, mobile apps, and so on.

Major Players:

• The four key players in the Indian IT sector are Tata Consultancy Services Ltd, Infosys Ltd, HCL Technologies, and Wipro Ltd.
• Tata Consultancy Services - TCS is the biggest India IT service company in India; it is the behemoth of the industry with a market capitalization of approximately Rs 12 lakh crores. It has around 5,56,000 employees as of 2022.
•  Infosys - The company is the second biggest player in the industry with a market capitalization of around Rs 6  lakh crores and a ten years CAGR revenue growth of 14%.
• HCL technologies - HCL Ltd is the fastest-growing player in this sector, with a ten-year CAGR revenue and profit growth of 20% and 23%, respectively. It has a market capitalization of approximately Rs 3 lakh Crores.
• Wipro - Wipro Ltd is the most well-known name in this industry with a tremendous experience in the field of 30+ years. It was one of the first players in this segment. It has a market capitalization of around Rs 2.5 lakh crores and employs more than 2,40,000 people.

Listed Peers: 

• The listed peers of Hexaware Technologies Ltd, as per its market capitalization and portfolio sizes, are Mphasis Ltd, Larsen & Turbo Technology Services Ltd, and Coforge Ltd.