BQ Blue's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages. These reports offer BloombergQuint's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
‘Cloudification' and ‘Digitalisation' had almost become synonymous with Covid-19.
Expectations of a material and permanent increase in growth/profitability of the industry factor-in aggressive assumptions around -
1. incremental monetizability of these technologies and 2. irreversible change in human behaviour.
Prior hyper-disruptive events (e.g. Spanish Flu, SARS, demonetisation) and current mobility trends present a contrasting evidence.
Hype aside, our analysis suggests Covid-19 can at best drive approximately 150 basis points growth acceleration over FY22-FY23.
If work-from-home is perpetuated, consensus expects material margin tailwinds.
But, we believe otherwise given our concerns around possible proliferation of talent as a service model.
For bottom-up investors, the sector presents interesting opportunities of growth/profitability improvement led by micro factors.
Fair valuations should be at least approximately 40% higher (versus pre-Covid-19) as investors rethink discount rates, growth horizons and terminal growth.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
