IT Q4 Results Review - Remain Selective Due To Macro Challenges: IDBI Capital

IDBI Capital Report

Q4 FY24 results were weak due to slowdown in discretionary spend, elongation of deal cycle and weak macro. Most of the companies are banking on growth in H2 FY25E thereby pushing growth expectation to FY26E. Consequently we have cut our revenue and EPS estimates by 4% and 3% for FY25E in large cap and by 3% & 7% for FY25E in midcaps.

Challenges still persist in terms of slow decision making, focus on cost efficiency program and reprioritisation of spends. This has led to cooling of stock prices. However, we still remain cautious in the IT sector.

We prefer companies where there is valuation comfort and has healthy growth expectation. Hence we prefer Wipro Ltd. and Infosys Ltd. in large caps and Newgen Software Technologies Ltd., Sonata Software Ltd. and Cyient Ltd. in mid-caps.

Key upside risk in the sector is earlier than expected FED interest rate cut which could boost client budgets (although seems difficult).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.