Education sector: IT's win-win bet - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Education sector: IT's win-win bet

Aug 28, 2009

With a huge gap in the demand and supply for talent across all sectors and painfully inadequate school infrastructure, the education sector indeed has strong tailwinds. As the education enters the electronic age, a lot of opportunities lie ahead for the Indian IT sector in the market of nurturing talent. If the recent "Inside the campus: IT in India's education sector" study by Springboard Research is to be believed, the Indian education sector is expected to ramp up its IT spending particularly in the areas like networking, basic infrastructure and IT security solutions. The sector that invested around US $356 m in IT in 2008 is expected to step up the investment by a CAGR of 19% to reach US $704 m by 2012. According to the survey, presently a majority of the IT budget is spent in buying software and installing hardware, with IT services forming a small portion of the pie. However, the allocation towards the last segment is set to increase as education goes on-line and the mode of delivery changes.

There is little doubt that the Indian IT service industry is keenly eyeing the opportunity in this sector, be it in developing software for delivering education and IT security or in providing network and infrastructure support. TCS, India's largest IT service provider, conducted its first "Web 2.0 Generation" survey across 14,000 high school children in 12 cities during FY09. The survey concluded that students in the metros and mini-metros are 'digital natives'; highly tech savvy, immersed online having technology at hand all the time. The increasing preference of the young towards the online mode of education, bonding and social networking is a societal trend which has significant implications for parents, educators, policy makers, potential employers as well as companies that want to sell to this class of future consumers in India.

Apart from this, there is ample evidence to confirm this trend. Given this scenario there appears a lot in store for companies like NIIT, Aptech, Educomp and Everonn that are creating best-in-class products and services for these true digital natives. Lately these businesses have been affected by the global slowdown which resulted in a softening of the job market marked by the hiring freeze from the major recruiters. But given the government's emphasis on public-private partnership in the education sector for implementation of ICT (Information and Communication Technology) and probable ramp up in IT spending, things are set to change for good soon enough.

By its very nature, the education sector is quite immune to the vagaries of global business cycles and investors will do well to keep an eye on developments in this sector. It can emerge out as a big market for IT companies planning to ramp up their revenues from the domestic market. It is a win - win business for Indian IT as they can make money by nurturing their own future talent pool.


Equitymaster requests your view! Post a comment on "Education sector: IT's win-win bet". Click here!

  

More Views on News

The Gold and Silver Bull Market is Not Over (Fast Profits Daily)

Sep 29, 2020

The last few days have been nerve-racking for bullion traders. Stay calm. The bull market still has a long way to go.

Earned Short Term Capital Gains on Shares? Here's What You Need to Know While Filing ITR (Outside View)

Sep 29, 2020

PersonalFN explains CBDT's clarification regarding scrip wise disclosure in ITR in case of short term capital gain.

This Smallcap is a Must Have Stock in Your Portfolio (Profit Hunter)

Sep 29, 2020

Investing in this smallcap could open doors of huge, long-lasting wealth.

Why the Market May Rally for a Few Days (Fast Profits Daily)

Sep 28, 2020

Why I think the market can rise for the next few days.

My Top Pick for 2021 is Not a Stock. It is Something Much More Powerful (Profit Hunter)

Sep 28, 2020

My top pick for 2021 is something that has helped me and my subscribers beat the stock market by a factor of 2:1.

More Views on News

Most Popular

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

My Top Stock to Buy in this Market Selloff (Profit Hunter)

Sep 22, 2020

The recent correction offers a great opportunity to buy this high conviction smallcap stock.

Can the Nifty Fall to 10,200? (Fast Profits Daily)

Sep 24, 2020

The Nifty has reached an important support level today. If it breaks then we could see further downside.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Sep 29, 2020 (Close)

MARKET STATS