The tech sector is in focus. The IT stocks saw significant selling pressure on Wednesday, a day after HCLTech’s Q4 results fell short of market expectations. All eyes are now on Infosys results due tomorrow. Can the tech bellwether buck the trend?
IT stock selloff
Even as investors await Infosys results with bated breath, HCLTech’s share price crashed 10.7% intra-day today. Other tech stocks also saw significant selling pressure. Tata Consultancy Services lost 2.8% market value, and Wipro’s share price was also down 0.49 percent.
“The weaker commentary on demand and near-term growth visibility triggered concerns around the sector’s earnings trajectory, leading to a sharp decline.” Shashwat Singh, a Fundamental Analyst at Bajaj Broking, said.
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With nearly all the major IT companies’ results already out, investors’ eyes are now on Infosys, which will release its quarterly earnings report on April 23.
The brokerage firm Axis Securities expects Infosys’ fourth quarter revenue to grow by 3.2 percent. The firm stated that the company’s revenue growth in the quarter is primarily driven by deal growth and cross-currency tailwinds.
Further, Axis Securities expects Infosys’ EBIT margins to improve by 22 basis points on a quarter-on-quarter basis. The broker said that the IT giants’ EBIT margin growth in the quarter was led by their cost-optimization program.
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Axis Securities highlighted that investors will be closely watching management’s commentary on the deal pipeline, client spending, and the outlook for acquisitions.
Furthermore, investors are paying close attention to Infosys management’s guidance for FY27.
Bajaj Brokings’ Singh said that the market will closely track the company’s management commentary to gauge the broader demand environment and understand the potential headwinds facing the IT services sector going forward.
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Furthermore, there have been reports that Infosys’ board of directors could discuss the company’s leadership change plans. Ahead of the end of the five-year term of the current CEO, Salil Parekh, in March 2027, the board could discuss succession plans.
According to an ET report, the board could extend Parekh’s term by two years to ensure a smooth transition at the helm. Financialexpress.com could not verify the news independently. We have reached out to the company and will update when we hear from them.
The 61-year-old Parekh has already surpassed Infosys’s normal retirement age of 60. Under Parekh’s leadership, Infosys has seen steady growth, growing about 2.5 times.