IT emerging as growth sector: Vikas Khemani

The sector can get re-rated significantly over the next four-five years. All the leading companies as well as smaller companies will be doing very well in the sector, says the Founder, Carnelian Capital.

The market has already been assigning a premium to most IT stocks. Do you think the Covid crisis is going to lead to mega trends in the manufacturing and IT sector even for the longer haul?
Absolutely. According to us, this is just the beginning of a very big trend. Significant shifts have happened and in some sense, I feel it is more like a Y2K event which accelerated the growth in IT services. This is the second phase of that. Today whether you like it or not, whichever company you are, whatever sector you are or even the governments have to spend a lot more on IT, specifically on digitisation and cloudification. These two-three trends, apart from the newer technologies which you just talked about are trends that are here to sustain and stay.

We have seen a big change in the demand environment from the large, small and medium companies. This is not a one-year or six-month trend. It is going to stay for three-five years. And if that is the case and if we are fairly convinced about the demand, then we have to look at the cost side. There are significant upticks happening on the margin. You do not have to spend as much on SG&A. Work from home has helped savings and you can access a talent pool outside the major cities as well. Each company will have an improvement of about 300 to 350 bps of possible margin which they can pass on partly.

So on one side, the demand environment is improving. On the other side, the cost structure is getting better in the free cash flow generating companies. Their PAT gets converted into free cash flow and they do not need to raise capital. Another very interesting part about this sector is here demand is global but the supply is local and that too by a handful of companies. About 10-15 companies are supplying the global demand. Historically, in the last four-five years, IT has been seen as a more defensive, low growth sector and now we will see a significant pick up in growth in the sector. It will become a growth sector.

There will be top line growth because of the operating leverage. According to me, most companies would grow in the 15-20% profitability range and with free cash flow generation of 5- 6%, valuations are not at all demanding. The sector can get re-rated significantly from here over the next four-five years.

There was a shock value after Covid and that is going away. I feel that it is a very big trend. You will see all the leading companies as well as smaller companies doing very well in the sector.

If I look at the PE multiples of top IT companies, the PE multiples of TCS is 20 plus, Infosys almost 20, HCL Tech nearing 20. Where is the scope for these companies to go higher?
Very interesting point. First of all in this sector leadership might not change. The top five-six companies will get disproportionately larger share because they have built a huge amount of moat. It is a very sticky business. Once you are into the ecosystem of a customer, it is very hard to change the customer.

More importantly, all these companies are very well placed to build the capabilities which are required for a changing environment. On the digital side, a huge amount of capability has been built by TCS, Infosys, Wipro and others. They will continue to benefit. The big change which has happened is the shift in the demand environment. When the demand environment is poor, even if you have good free cash flows, you will always be seen as a defensive sector. What has changed right now is the perception of the sector from a defensive sector to a growth sector. When this shift happens, you can go back and change history whether it was 2009 FMCG or industrials in 2003-2004. So a big change happens in the demand environment and throws open a possibility of re-rating.

Two vectors will play out over the next four-five years. One is that these companies will grow their earnings between 15% and 20%. Smaller companies probably can grow even 30-35% because of the base effect. Thus the earnings growth will be captured but invariably a significant re-rating will happen. I would not be surprised if most of these companies in a couple of years’ time trade at 35-40 PEs not unlike what has happened in case of FMCGs.

From a capability standpoint, most of our IT companies are doing transformative work. It is wrong to assume that they are doing some sort of cost arbitrage. Hence there will be a four-five year period of significant growth which will eventually lead to re-rating because none of these companies need to raise capital.

If the dollar does not weaken, what happens? Lots of IT companies have benefited on the margin front because of weakness in rupee or because of strength in dollar.
It is a very valid point but to counter that, each of these companies have savings between 300 and 300 bps on the cost aspect. Today with the work from home culture, they can access a talent pool which is remotely available. The cost of that talent pool will go down. You are no longer spending money or selling, general and administrative expenses that you used to spend before. There are lots of levers and I have always believed fundamentally if the demand environment is strong, margin will never be a problem. So assuming that the currency appreciates, I am sure there will be a lot of levers for these companies to manage that margin. Even if they maintain their margin profile, most of the companies will still come out very pretty.

IT emerging as growth sector: Vikas Khemani

Ketogenic Diet Side Effects: 5 Side Effects That Signal You Need To Quit This Diet

Keto Diet For Weight Loss: 5 Side Effects That Signal You Need To Quit This Diet Instantly

Ketogenic Diet: If you are getting keto flu, constipation or are not losing weight, then the keto diet is not for you. Here's what you need to know.

Keto diet side effects: Constipation is a common side effect of keto diet

Highlights

Keto diet can make you nauseous and make you want to throw up
It can cause diarrhoea and constipation
Irregular periods may also be caused by keto diet

The very popular keto diet is known to offer quick weight loss results. The diet involves eating carbs in low amounts, fats in high amounts and proteins in moderate amounts. Only 5% of your total daily calories should come from carbs. This forces your body to enter the state of ketosis, in which the body turns to fat for fuel. Giving up on one food group entirely is not considered a very healthy practice. It can lead to irritability, mood swings and several other side effects that may not be good for you in the long run.

Keto diet may be effective for weight loss, but there are side effects you need to look into

Nutritionists and health experts rarely advise following fad diets to achieve quick weight loss. In fact, just losing weight should not be your only goal. Getting fitter and stronger, with better stamina, good sleep quality and peace of mind.

Also read: Keto Diet For Beginners: 5 Tips That Can Make The Transition To Ketosis Easier

All of these goals can be achieved by following a healthy balanced diet, regular exercise and being physically active. Following are a few side effects of keto diet that may signal you should quit it instantly:

1. Constipation

Cutting down on carb-rich foods may restrict you from eating foods that are also rich in fibre. Whole wheat, rice, pulses and several other vegetables contain both carbs and fibre, and can help in keeping constipation away. Constipation is one of the most common side effects of following the keto diet. Make sure you eat sufficient amount of healthy fats and protein in order to prevent. If you still don't have regular bowel movement, it may time to quit keto diet.

2. Diarrhoea

This may be a side effect which occurs from eating fat in excess. The body is not used to metabolising fats in large quantities. Once you resume regular eating habits, your keto-related diarrhoea is likely to go away.

Keto diet may cause constipation and diarrhoea
Photo Credit: iStock

Also read: Keto Diet: Low Carb, Moderate Protein And High Fat, Plus 5 Lifestyle Tips For Effective Weight Loss

3. Keto flu

The infamous keto flu is a common side effect of keto diet. It can make you feel nauseous and give the feeling of throwing up as soon as you start following the keto diet. When following the diet, make sure you drink plenty of water and maintain your electrolyte intake to prevent keto flu. If symptoms don't go away, it's best you stop following the diet.

4. Irregular periods

Skipping one entire food group can cause hormonal imbalance and nutritional deficiencies. This may be the reason why your periods have become irregular. Stop following the diet instantly in this scenario.

5. You are not losing weight

Usually, the keto diet shows almost instant results. And if this is not the case, you are probably consuming too many calories from fats and proteins. It is better to eat a balanced diet and practice portion control, with regular exercise, for effective weight loss.

Also read: If You Have Stopped Losing Weight On Keto Diet, This Is What You Should Know

Disclaimer: This content including advice provides generic information only. It is in no way a substitute for qualified medical opinion. Always consult a specialist or your own doctor for more information. NDTV does not claim responsibility for this information.

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IT emerging as growth sector: Vikas Khemani

Verdict on Babri Demolition Case Involving LK Advani, MM Joshi & Uma Bharti on Sept 30 After 27 Years

INDIA

News18 »india

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Verdict on Babri Demolition Case Involving LK Advani, MM Joshi & Uma Bharti on Sept 30 After 27 Years

Facing criminal charges, senior BJP leaders LK Advani, Murli Manohar Joshi and Uma Bharti (not pictured) have denied the allegations as political conspiracy. (File photo/PTI)

The court is set to deliver its verdict in the case after 28 years. The date was fixed on the direction of the Supreme Court that had asked for the delivery of the judgment by September 30.

Last Updated: September 16, 2020, 2:36 PM IST

A special CBI court has fixed September 30 as the date for the trial in the 1992 Babri Masjid demolition case involving 32 accused, including BJP veterans LK Advani, MM Joshi, Uma Bharti and Vinay Katiyar.

The court is set to deliver its verdict in the case after 27 years. The date was fixed on the direction of the Supreme Court that had asked for the delivery of the judgment by September 30.

The top court, which had earlier fixed August 31 as the deadline for completion of proceedings including pronouncement of the verdict, took note of the report filed by special judge SK Yadav in the high-profile case.

A bench of justices RF Nariman, Navin Sinha and Indira Banerjee said, "Having read the report of Surendra Kumar Yadav, learned special judge, and considering that the proceedings are at the fag end, we grant one month's time, i.e., till September 30, 2020, to complete the proceedings including the delivery of judgment." The order was passed on August 19 and was uploaded on the apex court website recently.

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IT emerging as growth sector: Vikas Khemani

16 september history: today is M S Subbulakshmi birth anniversary know other events - 16 सितंबर का दिन : आज ही के दिन हुआ था भारत रत्न एम एस सुब्बालक्ष्मी का जन्म | Education News in Hindi

16 सितंबर का दिन : आज ही के दिन हुआ था भारत रत्न एम एस सुब्बालक्ष्मी का जन्म

Today In History: भारत रत्न से सम्मानित एम. एस. सुब्बालक्ष्मी (M S Subbulakshmi ) को संगीत जगत की अप्रतिम प्रतिभा और अविवादित सुर साम्राज्ञी के तौर पर जाना जाता है.

आज ही के दिन हुआ था भारत रत्न एम एस सुब्बालक्ष्मी का जन्म.

नई दिल्ली:

Today In History: भारत रत्न से सम्मानित एम. एस. सुब्बालक्ष्मी (M S Subbulakshmi ) को संगीत जगत की अप्रतिम प्रतिभा और अविवादित सुर साम्राज्ञी के तौर पर जाना जाता है. 16 सितंबर की तारीख इतिहास में संगीत की इस महान साधिका के जन्मदिन के तौर पर दर्ज है. 16 सितंबर 1916 को तमिलनाडु के मदुरै शहर में जन्मी सुब्बालक्ष्मी ने पांच साल की उम्र में संगीत की शिक्षा ग्रहण करना शुरू किया और दस साल की उम्र में अपना पहला डिस्क रिकॉर्ड किया. उन्होंने देश की बहुत सी भाषाओं में गीत गाए. यह उनकी कला साधना का ही प्रभाव था कि लता मंगेशकर ने उन्हें 'तपस्विनी' कहा, उस्ताद बडे ग़ुलाम अली ख़ां ने उन्हें 'सुस्वरलक्ष्मी' का नाम दिया, किशोरी आमोनकर उन्हें 'आठवां सुर' कहती थीं, जो संगीत के सात सुरों से ऊंचा है. उन्हें कला क्षेत्र में योगदान के लिए 1954 में पद्म भूषण से सम्मानित किया गया.

देश दुनिया के इतिहास में 16 सितंबर की तारीख पर दर्ज अन्य प्रमुख घटनाओं का सिलसिलेवार ब्यौरा इस प्रकार है-

1630 : मैसाच्युसेट्स के इलाके शॉमट का नाम बदलकर बोस्टन किया गया, जो अब अमेरिका का प्रमुख शहर है.

1795 : ब्रिटेन ने दक्षिण अफ्रीका के केपटाउन पर कब्जा किया.

1821 : मैक्सिको की स्वतंत्रता को मान्यता मिली.

1848 : फ्रांस ने अपने सभी उपनिवेशों में दास प्रथा को समाप्त किया.

1861 : ब्रिटेन के डाकघर ने बचत बैंक खातों की सुविधा शुरू की.

1906 : नार्वे के रोएल्ड एमंडसन ने चुंबकीय दक्षिणी ध्रुव की खोज की.

1908 : विलियम क्रेपो बिली ने वाहन निर्माता कंपनी जनरल मोटर्स की स्थापना की.

1916 : भारत रत्न शास्त्रीय गायिका और अभिनेत्री एम.एस. सुब्बालक्ष्मी का जन्म.

1967 : सोवियत संघ ने पूर्वी कजाख में परमाणु परीक्षण किया.

1977 : केसरबाई केरकर का बम्बई में निधन.

1978 : जनरल जिया उल हक पाकिस्तान के राष्ट्रपति निर्वाचित.

1986 : दक्षिण अफ़्रीका की एक सोने की खदान में फंस जाने से 177 लोग मारे गए.

2007 : वन टू गो एयरलांइस का विमान थाईलैंड में दुर्घटनाग्रस्त होने से 89 लोगों की मौत हुई.

(इस खबर को एनडीटीवी टीम ने संपादित नहीं किया है. यह सिंडीकेट फीड से सीधे प्रकाशित की गई है।)

M S Subbulakshmi 16 september history

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