Currency fluctuations significantly impact IT sector valuations as most companies derive 80-90% revenue from international markets. Every 1% change in USD/INR impacts margins by 0.3-0.5%. Currency depreciation provides cost advantage to Indian IT companies, while appreciation can impact competitiveness.

Key growth drivers include digital transformation (biggest driver), cloud adoption and migration, AI/ML services and automation, cybersecurity and data analytics, geopolitical factors favoring nearshoring, and global IT spending recovery expected to grow 8-10% in 2025.

Evaluate companies based on digital transformation capabilities, client relationships and retention, talent acquisition and retention, financial health and margins, growth prospects and market share, and ESG practices and sustainability focus. Consider both fundamental analysis and technical analysis for better decision making.

Key risks include currency sensitivity and fluctuations, competition and pricing pressure, talent acquisition and retention challenges, technology disruption and obsolescence, geopolitical factors and trade tensions, and economic slowdown and reduced IT spending. Diversification and risk management are crucial.

Use multiple valuation methods: P/E ratios (15-25x range), P/B ratios (3-8x range), EV/EBITDA (8-20x range), and DCF analysis considering growth prospects. Consider currency-adjusted valuations, hedging strategies, and competitive advantages. Focus on companies with strong fundamentals and growth prospects.