Its a big sea of red across the tech sector. The Nifty IT Index has nosedived over 3%. All major IT stocks are down over anywhere between 3-4% individually. Index Heavyweights like Infosys, HCL Tech, Wipro, TCS are struggling amid mounting concerns over revenue growth, macroeconomic uncertainties, and brokerage downgrades.
Bloodbath across Nifty IT Index
As of now, the Nifty IT index is down over 3%. The biggest losers include Wipro, plunging nearly 5%, followed by Infosys, which has slipped 4.8%. Heavyweights like HCL Tech, Persistent, LTIMindtree, and L&T Technology Services are all down around 3%, while Tech Mahindra, Coforge, and TCS are also witnessing losses of about 2% in intraday trade.
The sharp fall comes amid cautious global cues and rising concerns over discretionary IT spending.
Let’s take a look into what brokerages are saying about the IT stocks
Morgan Stanley on Tech Sector: Revenue growth at risk
Global brokerage Morgan Stanley has raised a red flag over the IT sector’s near-term prospects, pointing out potential downside risks to revenue growth and valuation multiples.
The brokerage has downgraded Infosys to Equal Weight from Overweight, slashing its target price to Rs 1,740 per share from Rs 2,150 per share.
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Some of the key insights of the brokerage include Coforge remains overweight, but target price has been cut from Rs 9,400 per share to Rs 11,500. TCS retains overweight status, though the target has been lowered to Rs 3,950 per share from Rs 4,660 per share.
HCL Tech and Tech Mahindra ratings remain at equal weight, with target prices trimmed to Rs 1,600 and Rs 1,550 per share, respectively.
The brokerage highlights that the shifting macroeconomic environment and rapid tech evolution could lead to slower revenue growth. In addition to this, while currency fluctuations provide some margin cushion, valuations might take a hit due to sector wide uncertainty.
Motilal Oswal: Cautious on IT Growth, Discretionary spending uncertain
The brokerage firm, Motilal Oswal has also turned cautious on the IT sector, citing uncertainty in discretionary spending due to changing macro conditions.
The brokerage believes that the anticipated revival in spending,
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