It is believed in the market that “Technology has the shelf life of a banana.” If that happens then what factors drives the value of Information Technology based companies whose survival is totally dependent on that. The answer of this question is not so easy as it appears to be, As whatever the size of organizations, large or small, face the same dilemma: Scare resources, choosing and deploying the right resources at right time & at right place to maximize the organization performance.

"It has been observed that the Valuation trend in the high growth segment of IT industry (E-Commerce & Social Networking) is on an upswing and though there exist limited public listed companies in this segment, majorly all trade at very high valuation multiples with corresponding high volatility owing to their sensitive business models, prone to competition with new technology and recent developments. Where would their Valuations be stabilized would be decided in times to come."

Why Sub Sector Categorization is necessary?

There is a difference in valuing a Company which invest in IT to increase the efficiency of its business and the Company whose survival is totally dependent on IT because Companies with a view to increase the efficiency might Invest in IT and often viewed as a cost center, and when a department is viewed solely as a cost center, budgets get squeezed year over year, but that would not be in the case of IT Co’s, as their view of investment might be different.

Therefore, to make the proper judgment on the parameters that derives the value of Companies in IT sector. We have divided the IT Sector into various Sub- Sectors...

To read the full article, please go to 'Valuation in IT Sector' article on our website

If you have any query related to Information Technology Sector Companies Valuation specifically and Business Valuation in general, feel free to contact:

Mr. Chander Sawhney
Vice President
Corporate Professionals
+911140622252, +919810557353,