Why should you own cybersecurity stocks in your investment portfolio?

Here’s why you should own a cybersecurity stock in your investment portfolio

As businesses around the world adapt to the new normal of preserving business continuity in the face of a pandemic, their data is increasingly exposed to hackers. In its quest for rapid digital transformation, India Inc. also faces a high-risk environment. Multiple endpoints in data chains have been developed through new operating models, allowing attackers to access critical business data. India’s Computer Emergency Response Team (CERT-In) observed around 6.07 lakh cybersecurity events in the first half of 2021 alone, including 12,000 cases involving government organizations.

Businesses and governments around the world are stepping up efforts to increase cyber resilience following a series of high-profile attacks. As a result, next-generation cybersecurity technology (both software and hardware) is in high demand, translating into favorable financial results for cybersecurity companies in 2021. Initially in 2021, cybersecurity outperformed the S&P 500 and the Nasdaq by 16.8%. The market has grown by 592% over the past 10 years, reaching US$425.8 billion in 2021. The scenario in India is very similar to that of the United States.

Why will cybersecurity companies succeed?

Investments in enterprise security and risk management in India are expected to increase by 9.5% from 2020 to reach US$2.08 billion in 2021. The need for cybersecurity goods will continue to rise for various reasons . Companies that supply such items will see their stock market values ​​rise accordingly.

Continuation of remote work

Organizations are more exposed than ever to cyber dangers as remote work arrangements become more common. Employees rely on their gadgets and home networks in remote work setups. These do not have the same level of security as a corporate environment. As a result, they create a weak point in the security of a corporate network.

Need for privacy

Data risk is increasingly recognized among tech-savvy customers. This is especially true as our lives become increasingly electronically connected, with everything from sensors to 5G. Consumers are wary of digital companies and criminal actors interfering in their personal lives.

Need to restrict ransomware

Organizations are seriously harmed by ransomware and other sophisticated attacks. Ransomware attacks have wreaked havoc in India. According to research, India saw the highest number of weekly assaults per organization (213) in the first months of 2021.

Popular cybersecurity stocks in India:

Rapid healing technologies– Quick Heal, a leading provider of cybersecurity products and solutions, offers a range of cloud-based and machine learning security solutions to keep threats and harmful traffic at bay. It now has a 30% retail market share and plans to grow further through deeper penetration in Tier I and Tier II cities. The business division generates 18% of the company’s sales. The business had a strong quarter in fiscal 2021, with sales up 63.9% year-on-year to Rs 105 crore.

SecureKloud Technologies– SecureKloud is a cloud-native company that provides enterprise security solutions, services and platforms. The company offers a proprietary identity and access management system that, among other things, can help enterprises with security, access control, governance, scalability, and full identity lifecycle management. The company’s software, Cloud Authmulti-factor authentication, secures a range of business applications by confirming unique identities in seconds. As of October 21, 2021, the company’s share price is up more than 100% year-to-date.

Cybertechnology systems and software– Businesses can use enterprise risk intelligence products, which include tactics to predict risk and minimize damage. Businesses benefit from real-time incident reporting, visualization of asset hazards, and in-depth analysis of global changes that may affect their operations and people. In the first quarter of 2021, the company’s net profit increased by 382.7% to Rs 2.80 crore, a significant increase from Rs 0.58 crore in the first quarter of 2020.

RS software– The world’s largest companies use specialized electronic payment systems from RS Software. Preventing fraudulent digital payment transactions is one of the company’s core services. It can create predictive fraud models based on customer data, resulting in a common fraud detection model. In addition, the organization provides consulting services on global payment mechanism regulatory compliance. It is now valued at Rs 85.74 crore on the stock market. The business achieved total revenue of Rs 375.98 crore and gross revenue of Rs 353.8 crore in the third quarter of 2021.

India is undoubtedly at a critical moment in its economic recovery. As India continues its rapid digital transformation to build resilience against pandemic-like disasters, cyber resilience will be key. As a result, the industry can offer significant investment potential.

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