While that’s largely true, my thesis for investing in HGS is that they will slowly start offering RPA and other Automation solutions as well as a cross-sell. Here’s a quote from their latest concall:
On the new services, over the last four years, we have invested a significant amount in developing new capabilities like robotic process automation, digital services like social care, analytics, Work@Home and platform based services. We are working on multiple engagements related to these services. The feedback from clients has been positive and our focus is to continue to provide them with differentiated experience, led by technology based solutions. The recent acquisition of Element is a part of that digital strategy.
The ‘Element’ they’re referring to is Element Solutions, which they recently acquired:
However, as already mentioned by me, the threat of disruption is still definitely big. But at the current valuation levels, I think the risk-reward pendulum is skewed more towards reward than risk. This is what I mentioned in my PF thread too: