Topics In Demand
Notification
New

No notification found.

Will we see a double-digit growth in FY23 in the Engineering R&D sector?
Will we see a double-digit growth in FY23 in the Engineering R&D sector?

318

2

In the past few months, starting from the end of the last financial year till this month, there has been a flurry of activity in the M&A side, especially for the engineering R&D sector in India. Coming from the high of the 2021, a year of resurgence and “back to business” for the ER&D sector, the overall optimism and availability of capital led companies in the space to undertake various mergers and acquisitions.

Major players like Wipro, Infosys, and HCL in the tech industry were acquiring and merging with companies even during the last quarter of FY22. These acquisitions have been able to capitalize on the upcoming increased demand that the companies have been anticipating in FY23. Companies have expanded their portfolios, entered newer geographies and verticals through these acquisitions.

ER&D 1

 

Taking a cue from the tech industry players, companies in the ER&D space have also gone on an acquisitions spree in the new financial year. This trend is visible across the spectrum, whether it is integrated players like HCL or pure-play ER&D companies like Cyient and KPIT. The acquisitions have been done to bolster engineering capabilities or enter a particular geography or strengthen a particular product or service segment.

This is particularly true for some companies such as Cyient and HCL who have been aggressively made acquisitions in this financial year. For Cyient, the acquisitions have been across various geographies including Asia and Europe, whether it has been to acquire Grit consulting to enhance its standing in metals, mining, and energy verticals, Citec to improve its plant and product engineering capabilities, or Celfinet to strengthen its wireless engineering offerings. Citec’s acquisition was also the largest outbound acquisition by an Indian engineering services company and Cyient’s largest acquisition to date. All these acquisitions have happened within 2-3 months.

HCL, on the other hand, has been acquiring companies which will strengthen digital engineering and aftermarket, Industry 4.0 offerings through its acquisitions, again within 5-6 months.

ER&D 2

 

Is it fair to say, then, that this momentum will continue throughout FY23 as well? Can the industry expect to see double digit growth again due to these inorganic growth strategies by the ER&D companies? Time will tell and we all have to wait and watch how these acquisitions pan out for these companies.


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


images
Vandhna Babu
Principal Analyst - Research

© Copyright nasscom. All Rights Reserved.