HOW TO MAKE SENSE OF THE IT SECTOR MELTDOWN

NVESTING is all about finding the right price for an asset.

- RAJAS KELKAR

For the right price, you may sell an asset you have owned for a long time or buy anew one. On the sell side, it is about appreciation in value; on the buy side, it is about fallen value. For many years, information technology services (IT services) stocks like TCS, Infosys, Wipro, HCL Tech were bellwethers. No matter the domestic situation, the export of software was a secular global market demand. Indian companies excelled in offering services that large foreign corporations needed since 2000.

The dramatic disruption due to advances in artificial intelligence means that technology is eating into the same business that perhaps helped build those smart software codes. Once modern computers know a programming language, they can write software to achieve clients’ desired outcomes. After pricing services by man-hours, software services companies began charging per line of code. It is hard to justify pricing now that the basic codes are not written by humans.