Morgan Stanley trims estimates for IT companies, flags near-term challenges

Mphasis

22/06/2023 08:37

** The near-term outlook for India's IT companies remains
challenging, Morgan Stanley analysts said in a note
    ** MS expects large-cap cos' 1QF24 revenue to be 'flattish'
(for Infosys  INFY.NS ) and declining (for others), with muted
pickup in 2Q
    ** Media reports pointing to further job cuts in recent
months by the U.S. and European companies, show tightening costs
given a tough macro outlook - MS
    ** Brokerage says pause in discretionary spending has not
been lifted, which could cloud expectations of recovery in 2QF24
as well
    ** Cuts F24 constant currency revenue growth estimates by up
to 424 bps, and EPS estimates by up to 4.4% for F24-26
    ** Trims PTs by 3% for MphasiS  MBFL.NS  and Wipro
 WIPR.NS , by 2% for Infosys and 1% for TCS  
    ** Indian IT firms will be closely monitoring Accenture's
 ACN.F  first-quarter earnings due later in the day to gauge the
spending environment and demand outlook
    

 (Reporting by Aleef Jahan in Bengaluru)
 ((aleefjahan.cs@thomsonreuters.com))