Business
JPMorgan turns cautious on IT, sees growth headwinds ahead
The brokerage downgraded HCL Technologies, Tata Technologies and Wipro to underweight, as current prices have yet to capture the price action so far. Its top picks remain TCS, Infosys, TechM, Coforge, Persistent and Sagility.
Weak demand, geopolitical uncertainty and AI-led deflation weigh on sector growth outlook for FY27
JPMorgan said it sees further cuts in FY27 revenue growth expectations for these companies. “With a softer start to the year, the ask rate for FY27 gets tougher, as the usual 1H strength is unlikely to play out this time,” said the brokerage’s analysts in a client note.
JPMorgan has cut April-June revenue growth assumptions for all companies on the back of delays in deal closures and revenue conversion. “Accenture’s print and guidance confirms that weakness is not only in 1Q27, but also likely to bleed into 2QFY27,” the note said.
JPMorgan said growth acceleration is unlikely even for mid-cap firms over the medium term.
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“Until we see AI inflation becoming a tailwind, we would prefer to be cautious on the pace of growth recovery, as well as structural growth for the industry.”
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