The Indian markets opened in the green but were moving between gains and losses on Tuesday’s choppy trade. On a global level, equities have been volatile as investors assess the outlook for monetary policy, inflation and the impact of China’s strict covid policies on the global economy. 

So far this year, FIIs have pulled out more than $22 billion from domestic markets. This amount is close to $27 billion that was pushed into Indian markets in 2020 and 2021 combined.

Recently JP Morgan downgraded the Indian Information Technology Sector to ‘Underweight’. It believes that the heydays for the sector are over.

“Indian IT stocks are the names of the most expensive services globally at a premium to digital native peers and Accenture, and at par with enterprise software that appears unsustainable. Sector reverse DCFs suggest that the market is still baking in 6-13% growth for Tier 1s and 14-33% for midcaps over the next decade; that seems optimistic given this remains a late cyclical sector for most names,” the brokerage said.

About five days ago, JP Morgan lowered Tata Consultancy Services Ltd (TCS), India’s top IT exporter, to an “underweight” rating from “neutral” but stayed “overweight” on rival Infosys. 

The shares of Tata Consultancy Services (TCS) declined by 13.77% and those of Infosys declined by 23.94% in year-to-date time.

TCS reported a net profit of ₹9926 crores in the March quarter as against ₹ 9,246 crores during the same quarter a year ago. However, it disappointed the D-Street as it failed to meet its expectations.

Infosys on the other hand reported a 12% year on year increase in its net profit at ₹5686 crores for the March quarter.

In March 2022, TCS announced a ₹ 18,000 crores buyback. About 4 crores shares were bought back at ₹ 4500 each. Soon after the buyback, the share price of the company started falling. The shares reached their 52-week high of ₹ 4043.00 in January this year. Since then, the shares fell 22.81%.

Infosys announced the re-appointment of Salil Parekh as its CEO and MD till March 31, 2027. Starting January 2, 2018, when he was the CEO and MD of Infosys, the shares of the company saw a rally of 187%, and its market value rose by nearly ₹4 lakh crore to reach Rs 6.22 lakh crore.

Kotak Institutional Equities has a ‘buy’ call on the shares of Infosys with a target price of ₹1820. The current market price of Infosys is Rs 1444.00. Therefore, this indicates an upside of 26.038%.

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