Best Information Technology stocks to buy in India 2022

Information Technology Sector: 

IT is the use of computers, storage, networking, and other physical equipment, infrastructure, and procedures to produce, process, store, secure, and exchange all types of electronic data. 

Commercial usage of information technology involves both computer technology and telecommunications. 

IoT, cloud computing, privacy, and internet security are all examples of information technology – IT services provided to clients by the world’s greatest software businesses. 

India’s IT Service Industry is a thriving industry that provides the highest quality information technology services to its clients.

IT companies have become a crucial aspect of large enterprises, as the world has become increasingly digital in recent years. Every industry benefits from technology and software, from insurance slips to medical reports; from payroll to customer service; from contact centers to legal systems to education.

India’s IT companies assist their clients in managing and monitoring their technical departments. Hardware services, cloud computing, cybersecurity, and network infrastructure are all examples of services. The role of an Indian information technology company is not limited to a single definition. It is diverse and all-inclusive.

IT Industry Functions: 

The infrastructure role encompasses all hardware, software, and network resources necessary for the establishment and functioning of an information technology organization. Several services include network administration, platform management, security, and storage architecture. 

IT Governance is the role that utilizes information technology systems and new techniques to ensure the efficient evaluation of a corporation or other individual customer. They are responsible for delivery, risk management, resource management, strategic alignment, and performance management as members of the IT governance team.

COBIT (Control Objectives for Information and Related Technologies) and ITIL are two examples of IT governance firms (Information Technology Infrastructure Library).

SaaS (Software as a Service) or FaaS (Function as a service) is an IT service department that provides a platform for businesses to run, create, and manage application capabilities. Several examples include cloud computing and database management. 

The emergence of Digitization:

In the last few years, we have witnessed the introduction of a new set of technologies in the information technology sphere that benefit the operation of an application or software. Cloud computing, artificial intelligence, machine learning, robots, and big data are just a few of these technologies.

The adoption of these cutting-edge technologies by some of the world’s largest corporations has created new opportunities and growth avenues for the information technology industry.

The digitalization of organizations has had a significant impact on IT and software breakthroughs. Everyone, from a small business owner to a large corporation, wants a website, an application, or software that relies on digital media to communicate with and create an audience.

For instance, electronic payments, online bookings, and so forth. According to current statistics and reports, digital services account for roughly 30% of the IT industry’s income. This figure is anticipated to rise to as high as 50% in the next few years. As a result, the digitalization of services appears to be a crucial component in this industry’s growth. 

Top 15 Information Technology companies to Invest:

S.No.NameCMP Rs.ROCE 5Yr %ROE 5Yr %P/EEV / EBITDAPB X PEPEGDebt / EqInt CoverageROCE %ROE %ROIC %ROA 12M %EPS 12M Rs.Mar Cap Rs.Cr.
1Tata Consultancy Services Ltd3634.1545.5635.1636.7524.74509.365.360.0882.0448.939.0658.2326.7598.551344198.61
2Infosys Ltd1822.1532.124.3136.7223.38402.454.950.07147.3635.2527.2232.1119.4449.2766307.21
3Wipro Ltd711.5519.3517.5732.2120.74203.257.320.2233.2222.119.5926.1213.2921.88390152.6
4HCL Technologies Ltd1232.129.0323.8928.9915.68159.732.010.134.5725.719.7820.0313.0542.51334364.36
5Larsen & Toubro Infotech Ltd6855.1540.5431.9856.8637.15875.643.120.139.33730.4750.7219.86120.78120060.93
6Mindtree Ltd4747.5528.972356.4436.09947.633.740.1238.636.129.7147.519.2884.1478230.52
7Oracle Financial Services Software Ltd494442.2228.0123.614.39146.792.230.01173.936.726.2628.1121.92209.8842623.22
8Tata Elxsi Ltd6289.3545.2331.6594.961.542749.255.050.0593.3840.0329.9228.2923.5366.2639159.77
9Happiest Minds Technologies Ltd1393.9518.8127.2135.0289.665056.51.180.3531.3234.4939.8769.2122.8910.0920578.91
10Tanla Platforms972.68.597.6734.6525.01513.170.320884.4751.9644.6543.4725.3228.0813235.08
11Route Mobile Ltd2168.334.3131.0984.1157.671455.945.180.0290.7733.228.9422.6116.1225.8912562.2
12Sonata Software Ltd961.242.7432.7835.9820.91401.543.890.125.441.6230.6928.7613.5726.710103.55
13Mastek Ltd3437.5520.5516.7236.6719.78372.930.490.3152.2230.2524.819.3411.8195.218734.79
14Cigniti Technologies Ltd597.3534.72-17.3210.8777.941.070.1226.6236.3632.9432.2620.8234.591673.91
15Expleo Solutions Ltd1072.637.5625.9722.613.36123.173.5067.0739.2328.4926.1521.0947.791107.44
  • ROCE % β€“ Return on Capital Employed in percentage, per-annum.
  • ROE % β€“ Return on Equity in percentage, per-annum.
  • P/E β€“ Price to Earnings ratio.
  • EV/EBITDA β€“ Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization expenses.
  • PEG β€“ Price to Earnings Growth ratio.
  • ROCE 5 Years β€“ Return on Capital Employed in percentage, 5 years average.
  • ROE 5 Years β€“ Return on Equity in percentage, 5 years average.

Tata Consultancy Services Ltd

Tata Consultancy Services Limited was founded in 1968 as a branch of Tata Sons. It is now the largest Indian information technology services company. In 1974, the company pioneered the notion of offshore information technology services and has grown into a global integrated full-service provider.

In August 2004, it was listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). TCS is a subsidiary of the Tata Group, with Tata Sons (rated [ICRA] AA (Stable)/[ICRA] A1+) controlling 72.02 percent of the company’s equity (as of December 31, 2020).

TCS provides a comprehensive range of services, including consultancy and service integration, digital transformation, and cognitive business operations. The corporation operates across five distinct industrial verticals:

1) Banking, financial services, and insurance (BFSI),

2) Retail and consumer business,

3) Communication, media, and technology,

4) Manufacturing and

5) Others.

The final category encompasses life sciences and healthcare, technology and services, as well as energy, natural resources, and utilities. TCS has operations throughout North America, Latin America, continental Europe, the United Kingdom, India, Asia Pacific, West Asia, and Africa.

TCS had a net profit of Rs. 32,562 crore on revenue of Rs. 1,64,177 crore in FY2021, up from a net profit of Rs. 32,447 crore on revenue of Rs. 1,56,949 crore in FY2020. The company’s net profit for FY2021, net of tax, comprises a one-time legal provisioning demand of Rs. 958 crores.

Infosys Ltd

Infosys is a prominent Indian information technology services firm that provides both digital and traditional IT services.

Revenue from digital services includes revenue from emerging segments such as artificial intelligence-based analytics and big data, engineering digital products and the Internet of Things (IoT), application program interface (API) and microservices, modernization of legacy technology systems, cloud application migration, and implementation of advanced cyber security systems.

Application development and management services, product engineering and management services, infrastructure management services, and enterprise application implementation, maintenance, and integration services are all examples of traditional IT services.

It serves vertical industries such as financial services, retail, communication, manufacturing, high-tech, and life sciences, as well as energy, utilities, resources, and services.

Infosys had 1,487 active clients and a presence in 46 countries as of September 30, 2020. As of September 30, 2020, the company’s promoters owned 12.95 percent of the company.

The company recorded a profit after tax (PAT) of Rs 9,131 crore for the six months ended September 30, 2020 (up from Rs 7,839 crore in fiscal 2020’s similar period) and net revenue of Rs 48,234 crore (Rs 44,432 crore).

Wipro Ltd

Wipro is a global leader in information technology, consulting, and business process outsourcing. It is the fourth largest Indian player in the worldwide information technology services market, behind Tata Consultancy Services (TCS), Infosys Limited (Infosys), and HCL Technologies Limited (HCL).

Wipro was founded in 1945 as Western India Vegetables Product Limited and was primarily a maker of consumer care products until 1980 when it diversified into the information technology services market.

With effect from April 1, 2012 (FY2013), the company separated its other divisions (consumer care and lighting, medical equipment, and infrastructure engineering) into a separate company called Wipro Enterprises Limited (WEL) in order to focus on its core competencies and allow both businesses to pursue their own growth strategies.

The company’s operations are divided into two primary categories: IT Services and IT Products.

Key service offerings under IT Services include digital strategy advisory, customer-centric design, technology consulting, IT consulting, custom application design, development, reengineering, and maintenance, systems integration, package implementation, cloud infrastructure services, analytics services, business process services, research, and development, and hardware and software design for leading enterprises worldwide.

HCL Technologies Ltd

HCL Tech is a market-leading worldwide information technology services company that is listed among the top four Indian information technology services organizations in terms of revenue.

Since its IPO in 1999, HCL Tech has concentrated on “transformational outsourcing” and offers an integrated portfolio of services, including software-led IT solutions, remote infrastructure management, engineering, research and development, and business process outsourcing.

HCL leverages its enormous global offshore infrastructure and 50-country network of offices to supply a range of services across key business verticals such as manufacturing, financial services, media, telecommunications, healthcare, technology, and public services.

Larsen & Toubro Infotech Ltd

LTI was founded in December 1996 and is located in Mumbai. The company is a subsidiary of L&T. LTI provides information technology services such as application development, maintenance, enterprise solutions, infrastructure management, testing, analytics, and artificial intelligence and cognitive computing.

The business relocated its product engineering services segment to a group company, Larsen & Toubro Technology Services (‘CRISIL AAA/Stable/CRISIL A1+’), in January 2014.

LTI operates offshore delivery centers in Mumbai, Pune, Bengaluru, and Chennai, as well as worldwide development centers in the United States, Canada, Europe, South Africa, the Middle East, and Singapore.

Mindtree Ltd

Mindtree, founded in 1999, is a technology solution provider that offers clients worldwide digital transformation and technology services.

The company categorizes its operations into four verticals, with CMT accounting for the lion’s share of revenue (50 percent of 9MFY21 consolidated revenue), followed by RCM (21%), banking, financial services, and insurance (20%), and TTH (20%). 9% Digital, test engineering, package solutions, infrastructure management, and technology support, and product engineering are among the company’s service offerings.

Mindtree’s revenue is generated primarily in the United States (77 percent of total revenue), followed by Europe (7 percent), the United Kingdom and Ireland (8 percent), and the rest of the world (9 percent) (8 percent).

Oracle Financial Services Software Ltd

Oracle Financial Services Software Ltd serves the financial services industry by providing financial software, bespoke application development, consultancy, IT infrastructure management, and outsourced business processing services.

The business was founded in 1989 and is headquartered in Mumbai, India. Oracle Global (Mauritius) Limited is a subsidiary of Oracle Financial Services Software Limited.

Tata Elxsi Ltd

Tata Elxsi Limited was founded in 1989 and specializes in the design and development of systems and software for industries such as automotive, aerospace, broadcast, communication, consumer electronics, and semiconductors.

Additionally, it provides industrial design and systems integration services to a variety of businesses. The bigger business component – Software Development & Services – is subdivided into the Embedded Product Design (EPD) and Industrial Design & Visualisation (IDV) divisions.

While the EPD division provides design and development services for hardware, software, and embedded systems throughout the product’s lifetime, the IDV division covers customers’ needs for industrial design, user experience, and service design, branding, and digital content marketing.

TEL’s headquarters are in Bangalore, and the company operates in the United States, Europe, Asia Pacific, and Japan. The company operates global development centers and studios in locations around India, including Bangalore, Thiruvananthapuram, Mumbai, and Pune.

Happiest Minds Technologies Ltd

Happiest Minds was created in 2011 and is headquartered in Bangalore. The company has operations in the United States, the United Kingdom, Canada, Australia, and the Middle East.

It is an information technology company ranked fourth in the category of information technology services that focuses on disruptive technologies such as artificial intelligence, blockchain, cloud, digital process automation, internet of things, robotics/drones, security, and virtual/augmented reality.

Ashok Soota, the company’s executive chairman, is the primary promoter. He was previously the Founding Chairman and Managing Director of MindTree; prior to MindTree, he oversaw Wipro’s IT division for fifteen years.

Route Mobile Ltd

Route Mobile is a supplier of Cloud Communication Platforms for enterprises, over-the-top (OTT) service providers, and mobile network operators (MNO). Their product line includes intelligent messaging, voice, email, and SMS filtering, analytics, and monetization solutions.

It was founded in 2004. It was added to the market in September 2020. The promoters have a combined experience of almost two decades in the software and communications industries.

Sonata Software Ltd

SSL was founded in 1986 and specializes in information technology consulting, product engineering services, application development, application management, managed testing, business intelligence, infrastructure management, packaged applications, and travel solutions.

The majority of the company’s services revenue comes from outside the United States and Europe, accounting for more than 84 percent of total revenue. SITL is primarily a software distributor with a concentration on the Indian market.

SSL declared a net profit of Rs 107 crore on net sales of Rs 1,756 crore for the six months ended September 30, 2020, compared to Rs 139 crore and Rs 1,578 crore for the same time last year.

Mastek Ltd

Mastek Limited was formed in 1982 under the name Management and Software Technology Private Limited. It is an information technology company that specializes in enterprise solutions for the public sector, retail, and financial services.

Mastek ltd portfolio of business and technology services includes information technology consulting, application development, systems integration, application management outsourcing, testing, data warehousing and business intelligence, application security, and customer relationship management (CRM) services. Mr. John Owen, the Group CEO, leads the company.

In February 2020, it bought Evosys. At the moment, the first leg of the transaction, which involves the cash acquisition of Evosys Middle East, has been completed. However, the second leg of the transaction, which involves the acquisition of Evosys’s international company via a demerger cooperation agreement and shareholders agreement, is awaiting regulatory approval.

Mastek had a total workforce of 3,354 employees as of September 30, 2020. The company is primarily focused on the UK and European markets, accounting for 66% of revenues in H1 FY2021. With the acquisition of Evosys, the Middle East region now contributes 12% of revenues, which was non-existent until 9M FY2020. Mastek reported consolidated sales of Rs. 795.8 crore and profit after tax of Rs. 105.7 crore in the first half of FY2021.

Cigniti Technologies Ltd

Cigniti Technologies Ltd is a quality engineering and software testing company that serves clients in a variety of sectors. In 1998, it was incorporated in Hyderabad, Telangana. The company is engaged in Quality Engineering & Software Testing services.

Expleo Solutions Ltd

ESL (earlier known as SQS BFSI India Ltd) was established in 1998, as an independent software tester, based out of Chennai. It is listed on National Stock Exchange and BSE Ltd.

Final Thoughts:

IT is a broad term that encompasses everything that businesses do with computers. Information technology is responsible for developing a company’s communications networks, safeguarding data and information, creating and administering databases, assisting employees with computer or mobile device problems, and performing a variety of other tasks to ensure the efficiency and security of business information systems.

Professionals in this sector are in high demand and rising, and those joining the field have a variety of career options.

In India, information technology is a multibillion-dollar sector composed of two primary components: information technology services and business process outsourcing (BPO).

The sector’s contribution to India’s GDP has climbed from 1.2 percent in 1998 to 7.7 percent in 2017. According to NASSCOM, the sector generated the US $180 billion in revenue in 2019, with export income being US $99 billion and domestic revenue totaling US $48, an increase of more than 13%.

India’s IT employment would total 4.36 million employees by 2020. The United States contributes to more than two-thirds of India’s exports of information technology services.

Disclaimer: All the information on this website is published in good faith and for general information purpose only.

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