Indian IT Sector has massively outperformed NASDAQ from its inception

Mr. Alok Jain, in this tweet has shared 2 charts which are super interesting.

1. Nifty IT in USD Terms mimics the performance of Nasdaq

Indian IT Index in USD terms has outperformed Nasdaq big time if we look at slightly longer timeframe.

Questions worth pondering upon

  • Why do you think has nasdaq under-performed Indian IT index in the last decade inspite of having the most smartest and growth oriented companies at a scale much larger than Indian peers?

  • Is Nasdaq undervalued and Indian IT overvalued ?

  • Going forward - What is the most likely scenario when it comes to returns and performance ?


Maybe they earn as per American standards and pay by Indian standards? Not much raw material costs?


Its a case of a lot of money chasing few assets. No need for any detailed fundamental analysis.


Seems wrong, correct me if wrong -

Since 2010, roughly it seems CNXIT has gone up 5.5 times but USDINR also has gone up 1.65 times so in USD terms, CNXIT went up 3.37 times which is much lower that Nasdaq.

CNXIT 5594 31110 5.56
NQ 1739 12900 7.41
USDINR 46.27 76.46 1.65
5.56/1.65 = 3.37

Since covid yeah maybe nasdaq is under performing a bit due to recent fall, and CNXIT has given larger impulse than normal. But diff can quickly go away too.

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Your observation is absolutely spot on.

The chart was indeed of longer time frame.

You are right. bull run in indian IT started in 2009 from where it did almost 3x in one year. Whereas nasdaq was flat during that phase.

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difference between developing & developed nation


yes so it fell more and then recovered. So we can change the story a bit based on points of reference.
Last decade belonged to US markets and NQ especially. Next one, who knows - 2000-2010 was flat for US and good for India, china, commodities etc. Hopefully that will repeat ( atleast the India part )

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My views

Because NASDAQ 100 is too much diversified that is it is a index of 100 stocks and for the index to raise majority of those 100 stocks has to perform well where as Nifty IT consists of only 10 stocks hence its performance looks better if those 10 stocks perform well.
US Companies don’t bother to spend excessive money. They sure did multiply the investment but Indian IT companies did better because they think twice before spending money. Its like comparing ISRO with NASA. ISRO can do everything cheaper than NASA because there is monetary restriction for ISRO but whereas it isn’t for NASA.
And these US companies started to outsource works to India only after sometime. And still they are willing to pay millions of dollars for bunch of morons because they belong to US and whereas for the same amount of money they can hire atleast 50 talented person from India. Loss making twitter pays 120 Crores for Vijaya Gadde who is a legal counsel. With 120 crore you can start and entire law office and hire 100 top Lawyers from industry in India(apart from ones who takes cases of politicians and big time criminals, they make hell a lot of money)

Also I tried to compared the money raised in IPO it wasn’t conclusive but since I spent time on gathering those info by searching each company name I’m just writing it below.

(conversion done roughly but considering the average exchange rate of the IPO year)
Apple 1980s - 79 Crores (101 Million USD)
Microsoft 1986 - 76 Crores (61 Million USD)
Amazon 1997 - 196 Crores ($54 million)
Tesla 2010 - 1033 Crores ($226 million)
Alphabet 2004 - 7552 Crores ($1666 million)
Meta 2012 - 85440 Crores ($16 billion)
Nvidia 1999 - 180 Crores ($42 million)

Whereas Indian counter parts raised
Hcl 1999 approx 740 Crores
infosys 1993 - 13 Crores
TCS 2004 - 7000 Crores
Tech Mahindra - 465 Crores
Wipro 1946 - 1,70,000 Yes One Lakh Seventy thousand

I personally feel that Indian IT is currently little bit overvalued.

If you hand pick the stocks either from US stocks or Indian stocks you can expect to get consistent returns. Cant say for sure that any stocks can become multibagger.