IT Industry To Recover After Next Quarter, Says Avendus' Andrew Holland

The Indian information technology industry is likely to come out of a slump after the next quarter as demand in the U.S. picks up, according to Andrew Holland.

The IT industry is a quarter away from coming out of its worst phase, Holland, the chief executive officer of Avendus Capital Public Markets Alternate Strategies LLP, told BQ Prime's Niraj Shah.

According to him, the U.S. Federal Reserve is likely to start cutting interest rates by the end of the current year. With demand resurgence in the U.S. following a reduction in rates, "growth is going to come in technology in the U.S., which will be a tailwind for our IT (sector)," he said.

Even as the banking sector in the country witnessed growth, it may face headwinds, said Holland, who has experience spanning four decades across the U.K., Asia, Japan and Indian markets.

The race to get deposits by offering higher interest rates by some non-banking financial institutions will lead to compression of net interest margin, he said.

"The other surprising factor is the rise in unsecured loans. We are growing at 6% plus, I am not sure why you have to kind of rush out to do unsecured loans at this point of the economic cycle," he said.