homemarket Newsstocks NewsHere is why JP Morgan has downgraded all IT players from overweight to neutral
Here is why JP Morgan has downgraded all IT players from overweight to neutral
JPMorgan has downgraded Infosys, Tech Mahindra, Mphasis and Persistent Systems to ‘neutral’ rating from ‘overweight’ rating as it expects the margin erosion to persist in the medium-term and stay meaningfully below the long-term average.
JPMorgan has downgraded Infosys, Tech Mahindra, Mphasis, and Persistent Systems to a ‘neutral’ rating from an ‘overweight’ rating.
The firm has turned more bearish on the IT sector as it expects the margin erosion to persist in the medium-term and stay meaningfully below the long-term averages. The firm also sees limited incremental margin levers going ahead.
The report states that the Indian IT names, even now, are trading at more than 40 percent premium to the pre-COVID long-term averages and that too when the peak growth is behind and the margins are structurally getting eroded.
This is the primary reason why JPMorgan has turned bearish and downgraded all the remaining overweight stocks within the IT names to neutral. It believes that any meaningful upside from here should be a rally to exit into the IT names in India.
At the time of publishing (11:40 am) the IT sector was under pressure due to the valuation concerns raised by brokerages and the JP Morgan downgrade.
Watch the accompanying video for more
To watch other videos in this series, click on the Standout Brokerage Report tab below.
(Edited by : Abhishek Jha)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election 2024: Gurugram gears up for crucial polls amidst economic boom and civic woes
Apr 24, 2024 11:41 PM
Lok Sabha Election 2024: Crucial seats up for grabs as Rajasthan, Maharashtra, Bihar gear up for 2nd phase of polls
Apr 24, 2024 11:40 PM