Indian IT to remain in distress for at least 2 years, M&As can help turn it around: Rakesh Jhunjhunwala

NEW DELHI: Ace investor Rakesh Jhunjhunwala says the distress in the IT industry will not go away anytime soon and the pain may persist for at least two more years.

In an interview with ETNow, the partner at Rare Enterprises said the cyclical slowdown that has gripped the sector can last for at least two years.

He, however, said after two decades of break-neck growth, the slowdown was normal. “If you have had 15-20 years of continuous growth, cyclicality may slow you down for a year or two,” he said.

India’s IT sector has been going through a rough patch. Infosys has cut its revenue guidance twice this financial year, while Nasscom has cut its aggregate picture.

Asked if the sector is struggling to grow owing to digitisation and when will it adjust to the 'new normal', Jhunjhunwala said he was very confident that IT entrepreneurs would adjust to the new normal sooner than expected.

He said M&A could be a way to achieve a turnaround. “Indian IT entrepreneurs are doing good, and they are very successful. However, they should change their approach and take more risks. They have huge cash on their books. So they should acquire small businesses,” he said.