HomeBusinessGoldman cuts Infosys, TCS to 'sell' in view of slowdown

Goldman cuts Infosys, TCS to ‘sell’ in view of slowdown

Goldman Sachs downgrades top Indian IT service providers Tata Consultancy Services and Infosys to “sell” from “buy” to “buy”, citing a possible slowdown in dollar revenue growth due to impending macroeconomic stress.

Analysts at Goldman wrote in a note, “We believe the slowdown in discretionary IT services will be significant around the growth and transformation agenda and forecast double-digit revenue growth on the road for the industry for FY24.” I haven’t fully reflected in yet.”

Goldman said it remains “more optimistic” on EBIT margin forecasts than revenue for Indian IT companies, given several levers such as higher employee utilization, controls on variable pay and annual wage increases.

India’s top IT services firms have begun freezing or cutting employee bonuses, worried that tighter budgets for US and European clients headed for a recession could sharply impact their own profits. Because the boom will fade due to the pandemic.

IT firms took an unexpected step when the world was hit by a pandemic two years ago as many global corporations poured millions of dollars into their reforms digital infrastructure.

However, several top tier companies missed profit estimates for the April-June quarter due to higher costs.

Goldman upgraded Wipro from “sell” to “buy” citing attractive valuations and the company’s recent uptick in order book.

The Nifty IT index was down 3.1% on Wednesday as a surprise rise in US inflation raised fears of aggressive rate hikes by the Federal Reserve.

The IT index has been one of the worst-hit sectors, falling over 27% so far this year, underperforming the benchmark Nifty 50 index, which is up 4%.

Hello Friends, My Name is Raushan Kumar. I am a Part-Time Blogger and Student. I am author of https://searchnews.in . We're dedicated to providing you the best of News, with a focus on Business, Health, Lifestyle, World, Tech, India, Gadget.


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