CLSA prefers these 3 companies in large-cap IT space

The first quarter of FY20 has so far been one of the most polarized earning seasons for Indian IT services firm in recent times. While TCS and Infosys started the results season with more than 10 percent revenue growth and strong outlook, the earnings season is headed distinctly downhill from there, said CLSA in its report.

“Most midcaps (LTI, Mindtree, Cyient, LTTS) and the sole large-cap (Wipro) have disappointed on either print ($rev/margins) or outlook or both. We expect this trend to continue with soft earnings expected at the remaining large-caps HCLT and very weak one at TechM,” the brokerage said in a report.

According to CLSA, the BFSI segment is seeing softness across board mainly in capital markets in the US and Europe. Retail appears to be at a bright spot with growth expected to bounce back from the next quarter.