Bullish market sentiment on Indian ER&D market players

Morgan Stanley today shared a bullish outlook on the Indian IT and ER&D players. While the article by Bloomberg beautifully captures the essence, here are the key themes that govern the ER&D market for remaining of CY'2023

👉 The deal closure was slow in H1'23, but quicker deal closures are expected in the later half of this year (read "large multi-staged digital transformation deals")

👉 Synergistic benefits from acquisitions for players like Cyient to creep in

👉 Improvement in margins atleast in ER&D space as price pressures ease

👉 New verticals addition (revenue diversification) like that of agribusiness by Tata Consultancy Services and HCLTech might as well ease the strain from BFSI and telecom

👉 Top-line benefits for GenerativeAI and AI-IoT market to creep in towards Q4'CY23 especially for firms like Infosys (have ~80 working projects in Infosys Topaz offering) and Tata Consultancy Services (have ~50 PoCs in GenAI space)

👉 Higher movement of top level C-suite executives in CY'23 itself across large players signals strong growth momentum for the overall ER&D market (though would add to troubles for few legacy players which I covered in my last post)