Four large-cap information technology companies were a part of the list of stocks that analysts on the Street were most pessimistic about in January, as per Bloomberg's Analyst Call Tracker. The only missing piece on the list was industry major Infosys as the stock managed to capture optimism from analysts and bucked the negative outlook expected for the rest of the IT pack.
"Even though the quarterly results of all five large-cap IT companies were not much ahead of the Street's estimate, Infosys still managed to attract investor confidence, primarily due to the upward revision in its revenue guidance for the current financial year (Apr-Mar)," said Sham Chandak, head of institutional broking, Wilson Financial Services.
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The Bengaluru-based software major had not just topped the Street's expectations on the revenue front in Oct-Dec, but also surprised investors by raising its revenue growth guidance for the current financial year (Apr-Mar) to 16-16.5% from the earlier 15-16%.
"Another source of optimism for Infosys arises from the kind of sector that the company caters to. The IT major laps up a majority of its revenue by providing services to financial institutions, a sector that is largely shielded from concerns around a recession in the US and Europe," Chandak added.
The company has also showcased resilient earnings in the past few quarters as compared to other industry peers which has also sparked confidence amongst analysts on the Street that it may be better placed to navigate through the slowdown expected in the sector.
Aditya Agarwala, Head of Research and Investment, Invest4edu, believes that the company's strong management pedigree, that sits at the core of its growth trajectory also evokes a greater degree of confidence amongst analysts.
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The company has also seen sustained order wins, especially from the US which just adds cherry on the cake for Infosys, Agarwala said.
Apart from Infosys, all other large-cap IT stocks - Wipro, Tech Mahindra, Tata Consultancy Services and HCL Technologies were a part of the list of stocks that received the maximum pessimism from analysts.
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