Wipro, Tech Mahindra: Jefferies downgrades six IT stocks on recession fears

Earlier in May, analysts at JP Morgan had downgraded the Indian IT sector citing growth concerns. Rising margin headwind in the near-term, JP Morgan had said then, was one of the key concerns.

The possibility of a recession in the US has made analysts cautious on the information technology (IT) pack, with those at Jefferies downgrading six large-and mid-cap companies. The list includes Tech Mahindra (Tech M), HCL Technologies (HCL Tech), Wipro, Coforge, Larsen & Toubro Infotech and Mindtree.

“Revenue growth for Indian IT firms is likely to moderate sharply by 340 basis points (bps) due to a recession in the US in fiscal 2023-24 (FY24). We lower our revenue and earnings per share (EPS) estimates by up to 15 per cent to factor this and expect earnings cuts to drive further price-earnings