JPMorgan sees 'deep value' in Indian IT stocks: Here's why
Indian IT stocks have taken a big hit this year: the Nifty IT index is down about 20% by the end of February, with giants like Infosys, TCS, and HCL Technologies all dropping sharply.
Still, JPMorgan thinks there's "deep value" here even after these losses.
Plumbers in the tech world
JPMorgan calls Indian tech firms the "plumbers in the tech world," saying the sector has recorded its steepest monthly decline since around 2018.
The bank feels there's only about 10% more downside left, even if growth stays slow.
Plus, new AI projects and a weaker rupee could help limit further risks.
Need for turnaround to impress investors
Fears around AI are making clients hesitate and slowing down deals after several years of muted, low-single-digit growth.
High valuations and weak earnings mean these companies need a real turnaround to impress investors, especially given their premium to some global peers on forward P/E multiples.