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CLSA said CY17 saw a better-than-feared year for IT sector even as growth & earnings disappointed.
"We don’t see strong bottom-up signs of growth recovery. Companies will have to negotiate challenges from immigration & tax change distractions," it added.
The research house expects demand to continue to remain soft in Q3 results for IT companies. December 2017 will be a seasonally weak quarter with constant currency QoQ growth of 1-2.6 percent, it said.
CLSA has reduced its growth expectations for Wipro, TCS & HCL Technologies, and lifted expectations for Infosys.
Infosys, HCL Technologies and TCS are its key buy ideas.
The research house has downgraded Wipro to Sell from Outperform and maintained Sell on Tech Mahindra.
It has lowered revenue & EPS by 1-2 percent for Wipro, TCS & HCL Technologies while it increased Infosys target by 8 percent but lowered Wipro target by 9 percent.
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