The shares of IT major Infosys crashed nearly 5 percent on March 12 to levels last seen in July 2024, eight months ago, following downgrades by key brokerages owing to uncertainty regarding discretionary spending by US clients.
Motilal Oswal on Infosys
Motilal Oswal Financial Services downgraded the stock to 'Neutral' and said that global geopolitical uncertainties coupled with the threat of possible trade war triggered by US President Donald Trump's tariffs are weighing on the stability of the IT sector. "Sentiment has turned cautious, with enterprises taking a 'wait-and-watch' stance," Motilal Oswal said.
Motilal Oswal Financial Services also downgraded Wipro to 'Sell', while upgrading TechM to 'Buy'. The brokerage called LTI Mindtree and TCS as its "preferred picks" for their risk-reward balance. In the mid-cap category, the brokerage retained its preference for Coforge and Persistent, and saw the recent correction as an opportunity to buy. It further downgrade L&T Tech Services to 'Neutral', citing "valuation discomfort".
Morgan Stanley on Infosys
Morgan Stanley downgraded Infosys to equal weight and cut target price to Rs 1,740 per share from the earlier Rs 2,150 per share. The latest target, however, implies an upside potential of over 9 percent from the current market price. Morgan Stanley added that it prefers the shares of TCS over Infosys.
The fall in the share price of Infosys was the top contributor to the decline in Nifty IT, which plunged over 3 percent on March 12. Other IT stocks also recorded strong losses, with Wipro falling over 5 percent to trade at Rs 263 apiece. HCL Tech, LTI Mindtree and Persistent shares meanwhile fell over 3 percent each.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
