Information Technology: The Contrarian Bet Now?

This article is an effort towards finding out the same.

The IT sector appears to be out of favour with its valuation falling by almost 31 per cent year-to-date (YTD). Furthermore, Nifty IT has dropped more than 23 per cent YTD, behind Nifty 50, which has gained around 0.75 per cent. So, does this seem like a good time to buy great IT companies the contrarian way? This article is an effort towards finding out the same 

According to Statista, the Information Technology (IT) industry contributed 8 per cent to India’s Gross Domestic Product (GDP). This is somewhat higher than in FY21 which was at 7.7 per cent but significantly lower than in FY15 at 9.5 per cent. Furthermore, it accounts for around 59 per cent of the worldwide services’ sourcing industry. In reality, the year 2021 proved to be a blockbuster for IT stocks and their investors, with Nifty IT returning over 58 per cent and Nifty 50 returning close to 24 per cent. In reality, after the pandemic wreaked devastation on the world, IT firms performed exceptionally well and many IT-specific new fund offers (NFOs) were launched in 2021.