JPMorgan turns cautious on Indian IT growth outlook

JPMorgan has downgraded its view on Indian IT companies, forecasting weaker demand and multiple headwinds over the next two years. The brokerage lowered ratings on several stocks including HCL Technologies and Wipro.

JPMorgan anticipates challenges for Indian IT firms over the next two years, citing uncertain demand and a mix of technology and economic headwinds.

The brokerage has downgraded several stocks, including HCL Technologies and Wipro, due to current valuations not reflecting these concerns.

Analysts foresee reduced revenue growth forecasts for FY27, with a softer start to the year impacting the usual first-half strength.

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JPMorgan has downgraded Indian equities to neutral from overweight. The bank warned that the Nifty index could fall to 20,500 in a bear-case scenario, implying a 15% downside from current levels. Near-term risks include elevated valuations and uncertainties from the Iran war and energy disruptions.

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Indian IT stocks fell sharply on Wednesday following HCL Technologies' disappointing fourth-quarter earnings and cautious outlook. The Nifty IT index suffered a substantial drop amid renewed investor worries over artificial intelligence disruption. Major firms including Infosys, TCS and Tech Mahindra also declined.

Market expert Sunil Subramaniam has advised caution for investors amid geopolitical uncertainty and rising input costs. He highlighted consumer durables, capital goods and public sector banks as preferred sectors.

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Several brokerages have identified 10 largecap stocks in India with significant upside potential despite rising oil prices from the US-Iran war. Crude oil has surpassed $125 per barrel, fueling inflation fears and market uncertainty. Stocks like HDFC Bank and Bharti Airtel top the lists from firms including Jefferies and Axis Direct.

 

 

 

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