Nifty IT in Wednesday’s trade was the sole loser-trading in the red as recessionary fears in the US outweighed. At the last count, the Nifty IT index was down 0.6 per cent, with all the constituents trading in the red, with the maximum plunge recorded for Infosys, followed by Wipro, HCL Technologies and TCS among others.

Global brokerage on IT stocks

Global brokerage Morgan Stanley has downgraded Infosys to an equal-weight call from the earlier overweight stance. The target on the stock has also been slashed to just Rs 1,740 from the earlier pegged target at Rs 2,150. This new target suggests a potential upside of 5 per cent from the previous close.

The call has been taken as the brokerage sees downside risk to IT companies’ revenue growth of India IT services & valuation multiples For select stocks, multiples could become more polarized, it added.

Shifts in macro environment & technology evolution are happening fast, noted Morgan Stanley.

Similarly,  for other IT stocks, like TCS, the brokerage has maintained an overweight rating with a target of Rs 3,950 slashed from the earlier pegged target at Rs 4,660. The said target implies  potential gains of 11 per cent.

For Coforge, the brokerage while maintaining an overweight call has slashed the target to Rs 9,400, implying 24 per cent potential gains.

Also Read: Infosys, Mphasis, TCS, HCL Tech slide as US tariffs, weak dollar dampen IT stocks

Furthermore on HCL Technologies and Tech Mahindra, the brokerage has maintained an equal-weight rating- with the target at Rs 1,600 and Rs 1,550 per share, respectively.

Other experts on IT stocks

Ambareesh Baliga, an independent market analyst, said on the IT stocks that as recession fears mounted and if this comes true in the US, investors should for the time being stay out of the IT stocks as their order book will likely be impacted.