BENGALURU : J.P.Morgan on Tuesday positioned Indian IT providers supplier HCL Technologies Ltd on “negative catalyst watch” forward of the earnings season, citing the best near-term dangers for the corporate.

“We remain cautious on the IT sector as we see downside risks to earnings and multiples from the weak fourth quarter prints and FY24 guidance,” the brokerage stated in a be aware.

J.P.Morgan stated it expects HCL to negatively shock analyst expectations, whereas additionally seeing draw back dangers to demand and progress commentary for Tata Consultancy Services Ltd, which is India’s high IT providers supplier, and Infosys Ltd, from monetary 12 months 2023-24.

“The lack of a stated target of double-digit revenue growth in FY24, an uncertain macro environment in addition to an unexpected CEO exit (for TCS), put estimates and multiples at risk, in our view,” J.P.Morgan stated.

The brokerage additionally anticipated Infosys to offer “soft” steerage because of the unsure macro surroundings and the departure of Mohit Joshi, its president and head of banking, monetary providers and insurance coverage.

TCS Chief Executive Officer Rajesh Gopinathan resigned final month, whereas Joshi was named CEO of Tech Mahindra.

Earlier, J.P.Morgan had stated TCS and Infosys have the best publicity to regional banks within the United States which are gripped by a monetary turmoil.

India’s IT trade is dealing with a difficult macroeconomic surroundings in its key markets of Europe and the U.S., the place expertise spending is contracting amid delays in decision-making on long-term offers.

The Nifty IT index fell 3.3 per cent in March, in opposition to a 0.3 per cent progress within the benchmark Nifty 50 index, and J.P.Morgan expects this underperformance to proceed on weak fourth quarter outcomes and steerage for FY24.